Answered

At Westonci.ca, we provide clear, reliable answers to all your questions. Join our vibrant community and get the solutions you need. Join our Q&A platform to connect with experts dedicated to providing precise answers to your questions in different areas. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Edgar owns 234 shares of Cawh Consolidated Bank, which he bought for $21.38 apiece. Each share pays a yearly dividend of $3.15. Edgar also owns two par value $1,000 bonds from Cawh Consolidated Bank. The bonds had a market value of 105.166 when he bought them, and pay 8.3% interest yearly. Which aspect of Edgar’s investment in Cawh Consolidated Bank offers a greater percent yield, and how much greater is it? a. The stocks have a yield 6.43 percentage points greater than that of the bonds. b. The stocks have a yield 6.84 percentage points greater than that of the bonds. c. The bonds have a yield 1.05 percentage points greater than that of the stocks. d. The bonds have a yield 9.13 percentage points higher than that of the stocks.

Sagot :

Answer: B. The stocks have a yield 6.84 percentage points greater than that of the bonds.

Step-by-step explanation:

Firstly, the yield for stocks will be calculated as:

= return/ investment cost

= $3.15/$ 21.38

= 0.14733395

= 14.73%

The yield for bonds will be calculated as:

= Return/Investment cost

Return = 1,000 x 8.3% = 83

Investment cost = 1,000 x 105.166/100 = 1051.66‬

Yield = 83/1051.66

= 0.07892284

= 7.89%

Then, the difference between the yield will be:

= 14.73% - 7.89%

= 6.84%

Therefore, the stocks have a yield 6.84 percentage points greater than that of the bonds.

Answer:

b.The stocks have a yield 6.84 percentage points greater than that of the bonds.    Step-by-step explanation: got it right on edge 2022!

Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.