Answer:
Equity will increased by 50%
Explanation:
Given:
Number of stock = 300
Per share value = $80
Stock value decline = 25%
Find:
Customer's equity will ?
Computation:
Market value = 300 × $80 = $24,000
New market value = $24000 × (100% - 25%) = $18,000
Margin = $24000 × 50% = $12,000
Credit balance = $24,000 (100% / 75%)
Credit balance = $24,000 + $12,000
Credit balance = $36,000
Equity % = [Credit balance - New market value / Credit balance]100
Equity % = [($36,000 - $18,000) / $18,000]100
Equity will increased by 50%
