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What is the new percentage margin in the account

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The price of Walmart stock is currently $42.52 and you decide to buy 100 shares on margin. The inital margin is 60% and the broker's maintenance margin is 40%. The broker charges an effective interest rate of 7% on the margin loan.

Problem 1: After the 7 months, the stock price has changed to $39.46 and the stock has paid dividends of $1.5 per share. What is the new percentage margin in the account?

Problem 2: What is your effective annual return?

Reference no: EM132826348

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