An investor decides to purchase shares of buff on margin


An investor decides to purchase shares of BUFF on margin. The investor has $750,000 cash in their account to use for the purchase (assume this is the only position in the account). The investor may borrow from their broker at 6% per year and must have an initial margin of at least 50%. The maintenance margin is 35%. The current market price of BUFF is $50.00 and BUFF pays quarterly dividends of $0.25 per share (assume the first dividend comes exactly 3 months from today). Below what stock price will the investor receive a margin call?

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Financial Management: An investor decides to purchase shares of buff on margin
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