You purchased 1, 000 shares of Starbucks common stock on margin at $60 per share. Assume the initial margin is 50% and t
Posted: Sat Nov 27, 2021 5:18 pm
You purchased 1, 000 shares of Starbucks common stock on margin
at $60 per share. Assume the initial margin is 50% and the
maintenance margin is 30%. Following an earnings warning, the price
of Starbucks starts declining rapidly. At what price do you get a
margin call from your broker? Assume the stock pays no dividends
and ignore interest on margin. A) $18.00 B) $39.00 C) $43.74 D)
$51.44 E) None of the above
at $60 per share. Assume the initial margin is 50% and the
maintenance margin is 30%. Following an earnings warning, the price
of Starbucks starts declining rapidly. At what price do you get a
margin call from your broker? Assume the stock pays no dividends
and ignore interest on margin. A) $18.00 B) $39.00 C) $43.74 D)
$51.44 E) None of the above