Bill is looking to purchase one of two potential investments. He is considering a 12-year 10% coupon bond issued by YakBak that is currently selling for $975.61. His other option is to buy stock in Skippylnc. Skippy just issued a $1.50 dividend and expects to grow at 6.5%, Skippy's current stock price is $35.64. If both investments are fairly priced and Bill intends to hold the investment indefinitely, which offers a higher return? O The bond, 5.18% -4.48% The bond, 10.00 % -4.48% The stock, 10.71% -10.00 % The stock, 10.98% 10.36%

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
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Bill is looking to purchase one of two potential investments. He is considering a 12-year 10% coupon bond issued by YakBak
that is currently selling for $975.61. His other option is to buy stock in Skippylnc. Skippy just issued a $1.50 dividend and
expects to grow at 6.5%, Skippy's current stock price is $35.64. If both investments are fairly priced and Bill intends to hold the
investment indefinitely, which offers a higher return?
O The bond, 5.18% -4.48%
O The bond, 10.00% > 4.48%
O The stock, 10.71% 10.00%
The stock, 10.98% 10.36%
Transcribed Image Text:Bill is looking to purchase one of two potential investments. He is considering a 12-year 10% coupon bond issued by YakBak that is currently selling for $975.61. His other option is to buy stock in Skippylnc. Skippy just issued a $1.50 dividend and expects to grow at 6.5%, Skippy's current stock price is $35.64. If both investments are fairly priced and Bill intends to hold the investment indefinitely, which offers a higher return? O The bond, 5.18% -4.48% O The bond, 10.00% > 4.48% O The stock, 10.71% 10.00% The stock, 10.98% 10.36%
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