Mary Blake is considering whether to buy stocks or bonds. She has a good understanding of the pros and cons of both. The stock she is looking at is trading at $59.25 with an annual dividend of $3.99. Meanwhile, the bond is trading at 96.25% with an annual interest rate of 11.5%. Calculate for Mary her yield for the stock and the bond. (Round your answers to the nearest tenth percent.) Yield Stock % Bond
Mary Blake is considering whether to buy stocks or bonds. She has a good understanding of the pros and cons of both. The stock she is looking at is trading at $59.25 with an annual dividend of $3.99. Meanwhile, the bond is trading at 96.25% with an annual interest rate of 11.5%. Calculate for Mary her yield for the stock and the bond. (Round your answers to the nearest tenth percent.) Yield Stock % Bond
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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Transcribed Image Text:Mary Blake is considering whether to buy stocks or bonds. She has a good understanding of the pros and cons of both. The stock she
is looking at is trading at $59.25 with an annual dividend of $3.99. Meanwhile, the bond is trading at 96.25% with an annual interest
rate of 11.5%.
Calculate for Mary her yield for the stock and the bond. (Round your answers to the nearest tenth percent.)
Yield
Stock
Bond
%
Expert Solution
Step 1: INTRODUCTION
Yield of a security means the total rate of return which is going to be received from the security. The yield considers the effect of the coupon rate as well as the change in price. Higher is the yield better it is for the investor.
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