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Maximum Allowable Margin for Lauren

Lauren has a margin account and deposits of $50,000. Assuming the initial margin requirements is 40%, and The Gentry shoe corporation is selling at $25.00 per share:
How many shares can Lauren purchase using the maximum allowable Margin?

What are Lauren's profit (loss) and the return on investment if the price of Gentry's stock rises to $45 per share and at $20.00 per share?

If the maintenance margin is 30%, to what price can Gentry Shoe fall before Lauren will receive a margin call?

Solution Preview

Lauren has a margin account and deposits of $50,000. Assuming the initial margin requirements is 40%, and The Gentry shoe corporation is selling at $25.00 per share:
How many shares can Lauren purchase using the maximum allowable Margin?

The initial margin requirement is 40%. ...

Solution Summary

This solution is comprised of a detailed explanation and calculation to find the maximum allowable margin.

$2.19