Six months ago, you purchased 1600 shares of DEF stock on margin at $20/share. The initial and maintenance margins are 55% and 30%, respectively. Your broker charges you a 4% annual interest rate on borrowed funds. You've received a $2 dividend per share over the course of your investment. DEF trades for $14/share today. Find your current margin. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (EX: .XXXX). Find the lowest price that DEF can trade for before you receive a margin call. 15.71 12.86 6.92 8.46 9.00 Find your ROIC if you choose to close your margin position today. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (ex: .XXXX).
Added by Jessica P.
Step 1
First, let's calculate the total cost of purchasing 1600 shares of DEF stock on margin at $20/share: Total cost = 1600 x $20 = $32,000 Show more…
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