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maxonik [38]
3 years ago
5

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?
Business
2 answers:
Kamila [148]3 years ago
7 0

Answer:

B. 6.84

Explanation:

took quiz

Nataliya [291]3 years ago
5 0

Answer:

The stocks yields 14.73% per year

the bonds yields 7.89% per year

The stock provide a better yield, which is 6.84% greater than bonds yield

Explanation:

the return will be calculate as follow:

return/ investment cost

<u>stocks</u>

return 3.15 dividends

cost 21.38 each stock

yield:

3.15 / 21.38 = 0,14733395 = 14.73%

<u></u>

<u>bonds</u>

return: cuopon payment 1,000 x 8.3% = 83

cost : market value 1,000 x 105.166/100 = 1,051.66‬

yield:

83/1051.66 = 0,07892284 = 7.89%

<em>Difference:</em>

stocks 14.73 - bonds 7.89 = 6.84

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