Kathryn purchased 800 shares of stock for 30 a share the, Ask an Expert

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Kathryn purchased 800 shares of stock for $30 a share. The initial margin is 55 percent and the maintenance margin is 40 percent. (5 points)

a. Construct a balance sheet depicting this transaction. Label each item such as Equity and so on.

b. What is your equity value if stock goes up to $40 per share? What is the new margin?

c. What is your equity value if stock goes down to $25? What is the new margin?

d. If the stock price falls below _____ Kathryn will receive a margin call.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92812352

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