Question
Today, you purchased a dividend paying stock on margin with an initial margin of 75%, a margin rate of 12%, and a $4,800 initial cash
Today, you purchased a dividend paying stock on margin with an initial margin of 75%, a margin rate of 12%, and a $4,800 initial cash deposit. At the time you purchased the stock, the share price was $400. You plan to hold this position for two months (60 days). You expect to receive a dividend of $5 per share in two months. Your broker does not update the loan balance until the end of each month. The maintenance margin requirement on this position is 40%. In two months, you expect the stock price to be $600 per share.
Based on this information, what will be your margin in two months?
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