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Running head: FINAL PROJECT PART THREE 1Final Project Part IIINameInstitutionDate
FINAL PROJECT PART III 2Final Project Part IIISchool versus WorkA.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 youbought five years ago, 100 Apple bonds (3.25% coupon rate) that are five years fromtheir 10-year maturity date, or a combination of both. Provide the appropriate dataand calculations that you would perform to make this decision.10-5 (years) = 5years3.25% of $100,000 = $3250 coupon rate each year. First year= $3250Second Year= $3250Third Year= $3250Fourth Year= $3250Firth Year will be 100,000 + 3250 = $103250The due amount for the bond for 5-year bond sales will be (3250 ×4) + 103250 = $116250From the nature of the case, it is evident that the best position will call for selling the 500apple stock shares rather than relying on the 100 Apple bonds, which will take another five yearsto mature and incur more costs.
FINAL PROJECT PART III 3B.What are the advantages and Disadvantages of selling a combination of stocks andbonds? Be sure to support your answer.AdvantagesAs far as the associated advantages are concerned, the shared cost in handling securityissues form one of the greatest benefits to be enjoyed in the combination of stock and bondselling. One will not be committed to handle any cost that is associated with security issuesassociated with the organizational selling of both its bonds and stocks. Moreover, it is alsoevident that stock and bond combination selling is associated with risk versus return parityjudgment by investors. Such engaged investor judgment offer a credible advantage in the sellingof a combination of stock and bonds. Relevantly, given the ability to engage huge money inreturn, associated with the combination of both stock and bonds selling, an affected organizationwill be entitled a safe environment to ascertain capital costs and both stock and bond pricingdecisions. The combination sale also means that an investor will reap a high amount of moneyfrom the committed business effort at once. Such a lump sum money flow is a potentialreflection of an encouraging advantage to the stock and bonds selling combination.