You sell short 100 shares of Lululemon at $350 a share

The initial margin is 50%

The cost of borrowing money in the margin account in 7%

Ignore cost of borrowing shares

The stock pays a dividend of $2 a share per year

The minimum maintenance requirement is 20%

1. In 2 years, the stock drops to $250 a share what is the annual percentage return on your investment? Make sure you clearly indicate if it is positive or negative!
2. What is the equity in your account after 2 years?
3. Calculate the price at which you will receive a margin call base your calculation on the information that is present when you make the purchase hence at time t=0