Question
You purchase 1,000 shares of Wash (WSH) at $35 per share by giving your broker $20,000 to establish your margin account. After a year (t=1),
You purchase 1,000 shares of Wash (WSH) at $35 per share by giving your broker $20,000 to establish your margin account. After a year (t=1), PFE paid out a dividend of $2 per share. The rate on the margin loan is 8%. If you earn no interest on the funds in your margin account, what is PFE's price at which you will receive a margin call?
A. $51.07
B. $44.38
C. $26.83
D. $18.93
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ANSWER D is the correct answer 1893 A margin account is a loan account with a b...
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Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
9781111532611, 1111222282, 1111532613, 978-1111222284
