Problem set 4 | Business & Finance homework help

Don't use plagiarized sources. Get Your Assignment on
Problem set 4 | Business & Finance homework help
Just from $13/Page
Order Now

Problem Set 4

 

1.  Determining Profit or Loss from an Investment.  Three years ago, you purchased 150 shares of IBM stock for $88 a share.  Today, you sold your IBM stock for $103 a share.  For this problem, ignore commissions that would be charged to buy and sell your IBM shares. 

 

a.  What is the amount of profit you earned on each share of IBM stock?

 

 

      bWhat is the total amount of profit for your IBM investment?

 

2.  Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for

$8,000 that pays $100 annual income. Also assume the investment’s value has decreased to $7,400 by the end of the year.

 

a.      What is the rate of return for this investment?

b.      Is the rate of return a positive or negative number?

 

3.  Calculating Earnings Per Share, Price-Earnings Ratio, and Book Value. As a stockholder in Bozo Oil Company, you receive its annual report. In the financial statements, the firm has reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock.

a.   Calculate the earnings per share of Bozo Oil’s common stock.

 

           

b.   Assuming that a share of Bozo Oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio?

 

           

c.   Calculate the book value of a share of Bozo Oil’s common stock.

     

     

 

4.  Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a

 corporate bond that pays 9.5 percent. The purchase price was $1,000. Also assume that three years     after your bond investment, comparable bonds are paying 8 percent.

 

a.   What is the annual dollar amount of interest that you will receive from your bond investment?

     

 

b.   Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which you could sell your bond?

 

c.   In your own words, explain why your bond increased or decreased in value.

     

5.   Using Margin. Bill Campbell invested $4,000 and borrowed $4,000 to purchase shares in Wal-Mart. At the time of investment, Wal-Mart was selling for $45 a share.

a.   If Bill paid $30 commission, how many shares could Bill buy if he used only his own money and did not use margin?

     

b.   If Bill paid $50 commission, how many shares could Bill buy if he used his $4,000 and borrowed $4,000 on margin to buy Wal-Mart stock?

     

c.   Assuming that Bill did use margin, paid $90 commission to sell his stock, and sold his Wal-Mart stock for $53, how much profit did he make on his Wal-Mart investment?

     

 

6.    Calculating yields. Assume you purchased a corporate bond at its current market price of $850 on January 2, 2002. It pays 9 percent interest and it will mature on December 31, 2011, at which time the corporation will pay you the face value of $1,000.

a.   Determine the current yield on your bond investment at the time of purchase.

b.   Determine the yield to maturity on your bond investment.

 

 

 

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

At Myhomeworkwriters.com, we always aim at 100% customer satisfaction. As such, we never compromise o the quality of our homework services. Our homework helpers ensure that they craft each paper carefully to match the requirements of the instruction form.

Professional Academic Writers

With Myhomeworkwriters.com, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.

Affordable Prices

Our company maintains a fair pricing system for all academic writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.

On-Time delivery

My Homework Writers guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.

100% Originality

Myhomeworkwriters.com maintains a zero-plagiarism policy in all papers. As such, My Homework Writers professional academic writers ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.

Customer Support 24/7

Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email: support@myhomeworkwriters.com.

Try it now!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Homework Writing Services

My Homework Writers holds a reputation for being a platform that provides high-quality homework writing services. All you need to do is provide us with all the necessary requirements of the paper and wait for quality results.

Essays

Essay Writing Services

At My Homework Writers, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our homework writing service providers are well-versed with all the aspects of developing high-quality and relevant essays.

Admissions

Admission and Business Papers

With Myhomeworkwriters.com, we will help you secure a position at your desired institution. Our essay writing services include the crafting of admissions papers. We will still help you climb your career ladder by helping you write the official papers that will help you secure a job. We will guide you on how to write an outstanding portfolio or resume.

Editing

Editing and Proofreading

Myhomeworkwriters.com has a professional editorial team that will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper posses quality and originality.

Coursework

Technical papers

My Homework Writers harbors professional academic writers from diverse academic disciplines. As such, we can develop homework writing services in all academic areas. The simplicity or complexity of the paper does not affect the quality of homework writing services.