You wish to buy 1,000 shares of a stock that is currently selling for $25/share....
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Accounting
You wish to buy 1,000 shares of a stock that is currently selling for $25/share. your broker offers you 50% margin on all transactions, with a maintenance margin of 35%. the interest charged on loans is 8% per year
A) at what price point will a margin call be triggered?
B) Two months later, the stock pays a dividend of 75 cents a share, and the stock is trading at 21.90. calculate your ROI at this point?
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