# investing

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How do I find stock on margin rate of return?
This is the question:
Ed Delahanty purchased 500 shares of Niagara Corporation stock on margin at the beginning of the year for \$30 per share. The initial margin requirement was 55%. Ed paid 13% interest on the margin loan and never faced a margin call. Niagara paid dividends of \$1 per share during the year.

At the end of the year, if Ed sold the Niagara stock for \$40 per share, what would Ed's rate of return be for the year?

At the end of the year, if Ed sold the Niagara stock for \$20 per share, what would Ed's rate of return be for the year?

If I did this correctly, i have the formula Margin = (market value of securities - debit balance) / market value of securities.. therefore i have

(20000-9000) / 20000 = 55% margin at \$40 per share
(10000 - 4500) / 10000 = 55% margin at \$20 per share

Am i doing this right???

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