Question: Paul has a margin account with a 40% initial margin requirement. He deposits P50,000. Suppose the stock is selling at P35 per share. How many

Paul has a margin account with a 40% initial margin requirement. He deposits P50,000. Suppose the stock is selling at P35 per share.

  1. How many shares can Paul purchase using the maximum allowable margin?

  2. If the maintenance margin requirement is 30%, to what price per share can the stock fall before Paul will receive a margin call?

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