How much would you have to deposit into the margin account, Financial Management

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How much would you have to deposit into the margin account

You open up a trading account with Merrill Lynch. You have decided to sell short 1,000 shares of Diageo (DEO) at a price of $36. Assume that the initial margin percentage is equal to 55% and the maintenance margin is equal to 35%.

(a) How much would you have to deposit into the margin account to open this position?

(b) At what share price will you receive a margin call?

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Financial Management: How much would you have to deposit into the margin account

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