Calculate the stock price that will trigger margin call

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Reference no: EM131819137

1. Suppose you buy 500 shares of ABC stock at $20 per share using 60% initial margin (you contribute 60% and borrow the additional 40%). The brokerage firm you use requires a 30% maintenance margin and changes 7% on borrowed funds. Calculate the stock price that will trigger a margin call at the end of one year? SHOW YOUR WORK.

Reference no: EM131819137

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