Louisa short sold 700 shares of Celpa stock at $35 a share at an initial margin of 55 percent. The maintenance margin is 30 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 $40 per share? What is the new margin?
c. What is the highest price the stock can go before she receives a margin call?