Question
You want to buy Facebook which is currently selling for $165 per share. a. If you have a margin account, how much do you need
You want to buy Facebook which is currently selling for $165 per share.
a. If you have a margin account, how much do you need to deposit into your account in order to buy 100 shares?
b. At what price will you receive a margin call assuming the maintenance margin requirement is 25%
c. If the stock pays a $1 dividend, and the interest on your margin account is 5%, what will the return on your investment be if the stock goes to $205 over the next year?
d. If the stock pays a $1 dividend and the interest on your margin account is 5%, what will be the return on your investment if the stock goes to $130?
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