chapter 15

.pdf

School

Lone Star College System, Woodlands *

*We aren’t endorsed by this school

Course

1307

Subject

Finance

Date

Jan 9, 2024

Type

pdf

Pages

2

Uploaded by EarlGalaxy12829

Report
1. Jean Miller purchased a $1,000 corporate bond for $880. The bond paid 3% annual interest. Three years later, she sold the bond for $960. Calculate the total return for Ms. Miller’s bond investment. (LO 15.3) The total return for Ms.Miller’s bond investment would be, [$1,000(Value) * 0.03(Interest)] *3 (Years) = $90. This is the total interest, which will help find the total return. TR is equal to, $90 + ($960 - $880) = $90 + $80 =$170 (TR). 2. Mark Crane purchased a $1,000 corporate bond 5 years ago for $1,060. The bond paid 2.5% annual interest. Five years later, he sold the bond for $950. Calculate the total return for Mr. Crane’s bond investment. (LO 15.3) The total return for Mr. Crane’s bond investment is, ($1,000 * 0.025) * 5 = $125, $125 + ($950-$1,060) = $15. 3. Sandra Waterman purchased a 52-week, $1,000 T-bill issued by the U.S. Treasury. The purchase price was $984. (LO 15.4) a. What is the amount of the discount? i. The amount of the discount is, $1,000 (T-bill) - $984 (purchase price) = $16. b. What is the amount Ms. Waterman will receive when the T-Bill matures? i. The amount Ms. Waterman will receive when the T-Bill matures would be, $1,000. c. What is the current yield for the 52-week T-Bill? i. The current yield for the 52-week T-Bill is [$16 (DP) / $984 (PP)]* 100= 16.26%.
5. Assume you own shares in Walmart and that the company currently earns $6.93 per share and pays annual dividend payments that total $2.16 a share each year. Calculate the dividend payout for Walmart. (LO 14.3) The dividend payout for walmart would be, $2.16 /$6.93 = 0.3116 = 31.16%
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help