The one year zero coupon yield is 6 per cent. the one year forward
To figure out what stock price would trigger a margin call in this scenario, we can start by calculating how much equity is needed to maintain that 30% level: $10,400 = 0.3 x Stock Value. Solving for Stock Value yields an answer of 34,666.67; so any share prices below or equal to that amount will result in a margin call and could lead to liquidation.
At a share price of $34666.67, your account equity would be equal to exactly 30% – or 10400 dollars – as any lower and you would have failed to meet your required maintenance margin level which triggered a margin call from your broker and require additional deposits into your trading account. Any higher than this price and you still have some positive equity left before being forced into liquidation due to not meeting the minimum requirement percentage set forth by the broker’s regulations on maintaining sufficient funds on deposit for investments made with borrowed money (margin).