You purchased 100 shares of Chipotle Mexican Grill, Inc. (CMG) common stock on a margin of $431.79 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $837.11. If the broker's call loan rate is 2.00%, what is your return on equity?
You purchased 100 shares of Chipotle Mexican Grill, Inc. (CMG) common stock on a margin of $431.79 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $837.11. If the broker's call loan rate is 2.00%, what is your return on equity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You purchased 100 shares of Chipotle Mexican Grill, Inc. (CMG) common stock on a margin of $431.79 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $837.11. If the broker's call loan rate is 2.00%, what is your return on equity?
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