# Problem set 4 | Business & Finance homework help

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.

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 the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Military
excellent work
Customer 456821, August 31st, 2022
Outstanding work!!
Customer 460073, August 4th, 2022
Good work.
Customer 458115, May 24th, 2022
Art (Fine arts, Performing arts)
very professional and well done.
Customer 462485, May 9th, 2022
Excellent.
Customer 460073, July 9th, 2022
Food & Nutrition
Work excellently done Looking forward to working with you again.
Customer 463463, November 4th, 2022
LIFE SPAN DEVELOPMENT
Satisfactory.
Customer 462623, April 15th, 2022
Military
Good work.
Customer 456821, May 11th, 2022
Education
Thank you. Well written
Customer 463647, February 3rd, 2023
Other
Thank you for the beautifully written paper and amazing customer service.
Customer 452455, May 26th, 2023
Nursing
I am pleased with my paper. The support team helping me to receive this finally was phenomenal. Thank you
Customer 453993, February 10th, 2020
Healthcare & Medical
Great
Customer 463473, November 4th, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend