Kathryn purchased 800 shares of stock for $30 a share. The initial margin is 55 percent and the maintenance margin is 40 percent. (5 points)
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 your equity value if stock goes down to $25? What is the new margin?
d. If the stock price falls below _____ Kathryn will receive a margin call.