You decide to buy 100 shares of Chevron (CVX) in a margin account that has an...

You decide to buy 100 shares of Chevron (CVX) in a margin account that has an initial margin of 50%. CVX pays an annual dividend of $4 a share and the stock is currently trading at $100. The cost of borrowing from your broker is 6%. What is your % return if the stock increases to $125 in 1 year? If the next day after you purchase the stock bad news comes out and drops the stock to $90. Will you receive a margin call if the maintenance margin is set at 20%?

please show the work with steps....thanks!

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jeff jeffy answered 9 months ago

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