Kathryn purchased 1200 shares of stock for $50 a share. The initial margin is 60 percent and the maintenance margin is 45 percent.
a) Construct a balance sheet depicting this transaction. Label each item such as Equity and so on.
b) What is your equity value if stock goes up to $57 per share? What is the new margin?
c) What is your equity value if stock goes down to $43? What is the new margin?
d) If the stock price falls below _____ Kathryn will receive a margin call.