New margin percentage, Question 1: What is your new margin percentage? Will you receive a, Accounting Basics

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New margin percentage

Problem:

You have borrowed $20,000 on margin to buy shares in Harley Davidson, which is now trading for $40 per share. Your account starts with an initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $35 per share.

Required:

Question 1: What is your new margin percentage? Will you receive a margin call?

Question 2: Exactly how low can the price of Disney shares fall before you receive a margin call?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics: New margin percentage

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Accounting Basics: New margin percentage

Reference No:- TGS0884431

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Recent Questions Asked Accounting Basics

Q : Describe the difference between alleles and genes

Q : Price of the stock go before you get a a margin call

Q : Maximum possible loss

Q : Current bid for a stock

Q : New margin percentage

Q : What is the nav

Q : Difference between a dominant gene and a recessive gene

Q : After-tax cash flow from the sale of asset

Q : Annual cost of sales

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Accounting Basics: New margin percentage

Reference No:- TGS0884431

Recent Questions Asked Accounting Basics

Q : Describe the difference between alleles and genes

Q : Price of the stock go before you get a a margin call

Q : Maximum possible loss

Q : Current bid for a stock

Q : New margin percentage

Q : What is the nav

Q : Difference between a dominant gene and a recessive gene

Q : After-tax cash flow from the sale of asset

Q : Annual cost of sales

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