An investor short sells 400 shares of Disney for $25 a share. The initial margin requirement (IMR) is 50 percent, and the maintenance margin requirement (MMR) is 25 percent. While the investor holds the short position, Disney pays a $0.50 dividend.
At what price would an investor receive a margin call?
Your answer: D was correct!
Ps = [25(1 + 0.5)] / 1.25
Ps = 30.00. |