You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the...

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call?

Assume the stock pays no dividend; ignore interest on margin.

Round your answer to the nearest cent (2 decimal places).

Expert Solution

Margin call price = Stock price per share * ( 1 - Initial margin % ) / ( 1 - Maintenance margin ) = 151 * ( 1 - 50% ) / ( 1 - 30% ) =

107.86

jeff jeffy answered 2 years ago

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