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during the coming year? and What is the tuture minimum price that MSFT's stock could reach before receiving a margin call?

during the coming year? and What is the tuture minimum price that MSFT's stock could reach before receiving a margin call?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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M1

Sam is bullish on MSFT's stock and wants to purchase 500 shares that are traded currently at $350 per share. To finance his investment, Sam borrowed funds from his broker at 10% and an initial margin of 50%. The broker required maintenance margin 40%. What will be Sam's rate of return if the MSFT's stock price goes up by 30% during the coming year? and What is the future minimum price that MSFT's stock could reach before receiving a margin call?
Transcribed Image Text:Sam is bullish on MSFT's stock and wants to purchase 500 shares that are traded currently at $350 per share. To finance his investment, Sam borrowed funds from his broker at 10% and an initial margin of 50%. The broker required maintenance margin 40%. What will be Sam's rate of return if the MSFT's stock price goes up by 30% during the coming year? and What is the future minimum price that MSFT's stock could reach before receiving a margin call?
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