The problems below illustrate stocks or bonds. Using theimportant terms related to stocks and bonds, answer the following problemscompletely.a. A land developer declared a dividend of P5,000,000 for its commonstock. Suppose there are 100,000 shares, how much is the dividendper share?b. Find the amount of semi-annual coupon for a P300,000 bonds whichpays 6.5% convertible semi-annually for its coupons.c. A certain company gave out P50 dividend per share for its commonstock. The market value of the stock is Pi25. Determine the stockyield ratio.d. What is the current yield of a bond whose face value is P15,000 andpays an annual interest of 6.5% if purchased at face value atP13,500?1. How can we determine if the problem or scenario involves orillustrates stocks or bonds?2. What possible problems or questions may we encounter when we aredealing with stocks? How about when we are dealing with bonds?3. What factors have a great effect on the return of your investmentsboth on buying stocks or buying bonds?4.Instruction. Reflect on the following questions and write your response onyour journal.1. Why is it necessary to illustrate stocks and bonds?2. What real life scenario or situation can you give to represent stocks andbonds?3. What is the importance of understanding the concepts or examples ofstocks and bonds?4. If you are going to invest your future money, will you prefer buying sharesor buying bonds? Why?

Dividend are paid to shareholders out of profit of the company and it is given from time to time.…

a. A land developer declared a dividend of P5,000,000 for its common stock. Suppose there are 100,000 shares, how much is the dividend per share? b. Find the amount of semi-annual coupon for a P300,000 bonds which pays 6.5% convertible semi-annually for its coupons. c. A certain company gave out P50 dividend per share for its common stock. The market value of the stock is P125. Determine the stock yield ratio. d. What is the current yield of a bond whose face value is P15,000 and pays an annual interest of 6.5% if purchased at face value at P13,500?

a. A land developer declared a dividend of P5,000,000 for its common stock. Suppose there are 100,000 shares, how much is the dividend per share? b. Find the amount of semi-annual coupon for a P300,000 bonds which pays 6.5% convertible semi-annually for its coupons. c. A certain company gave out P50 dividend per share for its common stock. The market value of the stock is P125. Determine the stock yield ratio. d. What is the current yield of a bond whose face value is P15,000 and pays an annual interest of 6.5% if purchased at face value at P13,500?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Answer the following problems with a complete solution. a. Find the 5% commission on the total sales of P20,000.00 b. You bought 20 shares at P750.00 per share. The broker charged her a P150.00 commission. Find the cost of the stock.c. You own 105 shares, par value P200.00. If the corporation declares an 8% dividend, what is the total dividend that should get? d. You bought ten P750.00 bonds at 315 plus a 6% brokerage fee. Find the investment.
A stock originally sold for K25 per share and ten years later, now sells for K40.The dividend last paid was K10. Find the Dividend yield and capital gains yield and total yield or return?
suppose south florida energy has preferred stock outstanding that pays an annual dividend of $5.95. If investors' required return is 6.8%, what is the present value of the preferred stock? the common stock is trading for $87.50 per share. 177.75 84.11 96.20 87.50 84.24
A firm has 7,000 outstanding shares with current value of 10£ per share. Planned dividend is £5 per share. What is the ex-dividend share price? How much is the share price if the company decides to use the cash it had originally earmarked for dividend for a share repurchase instead? A. £5, £10 B. £10, £5 C. £8, £10 D. £2, £12 ( explain well with step by step answer ).
Oweninc has a current stock price of $14.30 and is expected to pay a $0.70 dividend in one year. If Owenlnc's equity cost of capital 11%, what price would Oweninc's stock be expected to sell for immediately after it pays the dividend? OA. $12.14 OB. $15.87 OC. $10.62 OD. $15.17
7.
Lenusa Co. expect to earn $2 per share during the year. The expected payout ratio is 55%, the expected constant dividend growth rate is 6%, and common stock is currently selling for $22 per share. New shares can be sold to the public at the current price, but a 5% flotation fee will be incurred. What is the cost of equity of the common stock to be issued? a. 11% b. 12% c. 13% d. 13% e. 14%
A corporation’s ordinary shares currently pays an annual dividend of P5.40 per share. The required return on the ordinary share is 12%. The value of the share when dividends are expected to grow at an annual rate of 0% to infinity isa.120b.45c.30d.25
Oweninc has a current stock price of $13.00 and is expected to pay a $0,85 dividend in one year. If Oweninc's equity cost of capital is 11%, what price would Oweninc's stock be expected to sell for immediately after it pays the dividend? OA. $9.51 OB. $13.58 OC. $14.43 OD. $10.86 Mayt
An investor bought 200 CYH shares with a par value of P1.00 per share at P50.00. He received cash dividends of P2.00 per share. The company also declares split dividend of 2-1. The market price after the payment of split is P30.00. Assuming that the investor sold all his shares, how much is the capital gains on the sale of shares of stocks (disregard commission and other charges)? a. 2,400 b. 14,400 c. 12,000 d. 14,000
A certain land developer declared a dividend of 32 pesos per share for the common stock. If the common stock closes 105 pesos, how large is the stock yield ratio on this investment? (Show your complete solution. Then, encircle your final answer.)
A. Torch Industries can issue perpetual preferred stock at a price of $55.00 a share. The stock would pay a constant annual dividend of $4.50 a share. What is the company's cost of preferred stock, rp? Round your answer to two decimal places. = %_______ B. The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 15%, its before-tax cost of debt is 8%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firm’s total debt, which is the sum of the company’s short-term debt and long-term debt, equals $1,180. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Assets Liabilities And Equity Cash $ 120 Accounts payable and accruals $ 10 Accounts receivable 240 Short-term debt 60 Inventories 360 Long-term debt 1,120 Plant and equipment, net 2,160 Common equity 1,690 Total assets $2,880 Total liabilities and equity $2,880 Calculate Paulson's WACC using…

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