Question 1

Assume 25,000 shares of cumulative preferred at $2.50 per share and 50,000 shares of common. Find the following:
 $$\begin{array} { | l | l | l | l | } 
\hline & 2016 & 2017 & 2018 \
\hline \text { Dividend } & & & \
\text { Paid } & \$ 9,000 & \$ 0 & \$ 185,000 \
\hline \text { Preferred } & & & \
\text { Dividend } & \text { A } & \text { B } & \text { C } \
\hline \text { Common } & & & \
\text { Dividend } & \text { D } & \text { E } & \text { F } \
\hline
\end{array}$$

Accepted Answer

The answer of Assume 25,000 shares of cumulative preferred at...

Question 2

Assume that a bond sells at 98 ½ (pays 15% interest). If Bill Smith buys four bonds (assume no commission), what is the total dollar cost?

Accepted Answer

98.5% × $1,000 = $985 × 4 = $3,940.

Question 3

The stock of Morris Co. is trading at $32.25. The price-earnings ratio is 14 times earnings. Can you calculate the earnings per share (to the nearest cent)for Morris Co.?

Accepted Answer

$32.25/14 = $2.30.

Question 4

Calculate the current yield of this bond:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11 \quad22 } & ? & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of Calculate the current yield of this bond:
...

Question 5

Calculate the closing price of this bond:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11 \quad22 } & & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of Calculate the closing price of this bond:
...

Question 6

Assume that a bond sells at 98 ½ (pays 15% interest). Calculate the bond yield (to nearest tenth percent).

Accepted Answer

Interest = .15 × $1,000 = $150; Dollar cost = .985 × $1,000 = $985; Yield = $150 / $985 = 15.2%.

Question 7

Assume that a bond sells at 98 ½ (pays 15% interest). What is the total interest Bill will receive at the end of each year if Bill owns 4 bonds?

Accepted Answer

15% = .15 × $1,000 = $150; $150 × 4 = $600.

Question 8

Assume that a bond sells at 98 3/4 (pays 14% interest). If Jorge Galves buys four bonds (assume no commission), what is the total dollar cost?

Accepted Answer

98.75% × $1,000 = $987.50 × 4 = $3,950.00.

Question 9

Nancy Ford bought 300 shares of Braniff stock at $3 per share. Assume a commission of 3% of the purchase price. What is the total cost to Nancy?

Accepted Answer

$900 × (100% + 3%)= $927.

Question 10

In dollars, what was yesterday's close?
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of In dollars, what was yesterday's close?
 \[\begin{array}...

Question 11

Assume that a bond sells at 98 3/4 (pays 14% interest). Calculate the bond yield (to nearest whole percent).

Accepted Answer

14% × $1,000 = $140; 98.75% × $1,000 = $987.50; $140 / $987.50 = 14%.

Question 12

The Ranger Co. earns $4.50 per share. Today, the stock is trading at 42 1/2. The company pays an annual dividend of $.85. Can you calculate (A)the price-earnings ratio (round to whole number)and (B)the yield on the stock?

Accepted Answer

A. 42.50% × $1,000 = $42.50; PE = $42.50/4.5 = 9.44 = 9; B. yield = $.85/$42.50 = .02, or 2%.

Question 13

In what year does the bond mature?
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of In what year does the bond mature?
...

Question 14

Is this bond trading at a premium or a discount?
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of Is this bond trading at a premium...

Question 15

What is the annual interest on this bond?
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11\quad 22 } & & 10 & 62 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of What is the annual interest on this...

Question 16

What interest rate is the bond paying?
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \
\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \
\hline
\end{array}$$

Accepted Answer

The answer of What interest rate is the bond paying?
...

Question 17

Assume that a bond sells at 98 3/4 (paid 14% interest). Bill buys four bonds. Jorge buys four bonds. What is the total interest Bill would receive at the end of each year?

Accepted Answer

14% × $1,000 = $140 × 4 = $560.

Question 18

Bill Bone buys five bonds of UIC Co. at 92. What is the premium or discount per bond for Bill?

Accepted Answer

$1,000 - (92% × $1,000)= $1,000 - $920 = $80.

Question 19

Assume 15,000 shares of cumulative preferred at $1.80 per share and 80,000 shares of common. Find the following:
 $$\begin{array} { | l | l | l | l | } 
\hline & 2016 & 2017 & 2018 \
\hline \text { Dividend } & & & \
\text { Paid } & \$ 0 & \$ 15,000 & \$ 98,000 \
\hline \text { Preferred } & & & \
\text { Dividend } & \text { A } & \text { B } & \text { C } \
\hline \text { Common } & & & \
\text { Dividend } & \text { D } & \text { E } & \text { F } \
\hline
\end{array}$$

Accepted Answer

The answer of Assume 15,000 shares of cumulative preferred at...

Question 20

Linda Summers bought four bonds of AMT Co. 11 3/4 18 at 85 and five bonds of RT Co. 14 S 17 for 91. If the commission on the bonds is $2.50 per bond, what was the total cost of all the purchases?

Accepted Answer

(4 × $850)+ (5 × $910)+ (9 × $2.50)= $7,972.50.

Quiz 21: Stocks, Bonds, and Mutual Funds

Assume that a bond sells at 98 ½ (pays 15% interest). If Bill Smith buys four bonds (assume no commission), what is the total dollar cost?

The stock of Morris Co. is trading at $32.25. The price-earnings ratio is 14 times earnings. Can you calculate the earnings per share (to the nearest cent)for Morris Co.?

Calculate the current yield of this bond: $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11 \quad22 } & ? & 10 & 102 & + 1.25 \\\hline\end{array}$

Calculate the closing price of this bond: $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11 \quad22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$

Assume that a bond sells at 98 ½ (pays 15% interest). Calculate the bond yield (to nearest tenth percent).

Assume that a bond sells at 98 ½ (pays 15% interest). What is the total interest Bill will receive at the end of each year if Bill owns 4 bonds?

Assume that a bond sells at 98 3/4 (pays 14% interest). If Jorge Galves buys four bonds (assume no commission), what is the total dollar cost?

Nancy Ford bought 300 shares of Braniff stock at $3 per share. Assume a commission of 3% of the purchase price. What is the total cost to Nancy?

In dollars, what was yesterday's close? $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$

Assume that a bond sells at 98 3/4 (pays 14% interest). Calculate the bond yield (to nearest whole percent).

The Ranger Co. earns $4.50 per share. Today, the stock is trading at 42 1/2. The company pays an annual dividend of $.85. Can you calculate (A)the price-earnings ratio (round to whole number)and (B)the yield on the stock?

In what year does the bond mature? $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$

Is this bond trading at a premium or a discount? $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$

What is the annual interest on this bond? $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11\quad 22 } & & 10 & 62 & + 1.25 \\\hline\end{array}$

What interest rate is the bond paying? $\begin{array} { | l | l | l | l | l | } \hline \text { Bond } & \text { Current Yield } & \text { Vol } & \text { Close } & \text { Net Change } \\\hline \text { Action 11\quad 22 } & & 10 & 102 & + 1.25 \\\hline\end{array}$

Assume that a bond sells at 98 3/4 (paid 14% interest). Bill buys four bonds. Jorge buys four bonds. What is the total interest Bill would receive at the end of each year?

Bill Bone buys five bonds of UIC Co. at 92. What is the premium or discount per bond for Bill?

Linda Summers bought four bonds of AMT Co. 11 3/4 18 at 85 and five bonds of RT Co. 14 S 17 for 91. If the commission on the bonds is $2.50 per bond, what was the total cost of all the purchases?