Final Project Part III.docx - Running head FINAL PROJECT PART THREE Final Project Part III Name Institution Date 1 FINAL PROJECT PART III 2 Final

Final Project Part III.docx - Running head FINAL PROJECT...

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Running head: FINAL PROJECT PART THREE 1 Final Project Part III Name Institution Date
FINAL PROJECT PART III 2 Final Project Part III School versus Work A. The school you would like to attend costs $100, 000. To help finance your education, you need to choose whether or not to sell any of your 500 shares of Apple stock you bought five years ago, 100 Apple bonds (3.25% coupon rate) that are five years from their 10-year maturity date, or a combination of both. Provide the appropriate data and calculations that you would perform to make this decision. 10-5 (years) = 5years 3.25% of $100,000 = $3250 coupon rate each year. First year = $3250 Second Year = $3250 Third Year = $3250 Fourth Year = $3250 Firth Year will be 100,000 + 3250 = $103250 The due amount for the bond for 5-year bond sales will be (3250 ×4) + 103250 = $116250 From the nature of the case, it is evident that the best position will call for selling the 500 apple stock shares rather than relying on the 100 Apple bonds, which will take another five years to mature and incur more costs.
FINAL PROJECT PART III 3 B. What are the advantages and Disadvantages of selling a combination of stocks and bonds? Be sure to support your answer. Advantages As far as the associated advantages are concerned, the shared cost in handling security issues form one of the greatest benefits to be enjoyed in the combination of stock and bond selling. One will not be committed to handle any cost that is associated with security issues associated with the organizational selling of both its bonds and stocks. Moreover, it is also evident that stock and bond combination selling is associated with risk versus return parity judgment by investors. Such engaged investor judgment offer a credible advantage in the selling of a combination of stock and bonds. Relevantly, given the ability to engage huge money in return, associated with the combination of both stock and bonds selling, an affected organization will be entitled a safe environment to ascertain capital costs and both stock and bond pricing decisions. The combination sale also means that an investor will reap a high amount of money from the committed business effort at once. Such a lump sum money flow is a potential reflection of an encouraging advantage to the stock and bonds selling combination.

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