Questions from Personal Finance

Q: A stock sells at $15 per share. (a

A stock sells at $15 per share. (a) What is the EPS for the company if it has a P/E ratio of 20? (b) If the company’s dividend yield is 3 percent, what is its dividend per share? (c) What is the book...

Q: For a municipal bond paying 3.4 percent for a taxpayer

For a municipal bond paying 3.4 percent for a taxpayer in the 25 percent tax bracket, what is the equivalent taxable yield? (Hint: See page 140.) Page 140: //

Q: A corporate bond maturing in 22 years with a coupon rate of

A corporate bond maturing in 22 years with a coupon rate of 8.2 percent was purchased for $1,100 and is now selling for $1,190. (a) What is its current yield? (b) Calculate the bond’...

Q: Michael Margolis is a single parent and motivational training consultant from Palatine

Michael Margolis is a single parent and motivational training consultant from Palatine, Illinois. He is wondering about potential returns on investments given certain amounts of risk. Michael invested...

Q: Your neighbor, Kitty Kardashian, of Philadelphia, Pennsylvania, bought

Your neighbor, Kitty Kardashian, of Philadelphia, Pennsylvania, bought $5,000 worth of mutual funds with a back-end load of 5 percent if she sells within the first year. It decreases 1 percent a year...

Q: A year ago, George Jetson, from Orbit City, Texas

A year ago, George Jetson, from Orbit City, Texas, invested $1,000 by buying 100 shares of the Can’t Lose Mutual Fund, an aggressive growth no-load mutual fund. George reinvested his dividends, so he...

Q: Two years ago, Izabella Martinez, from Atlanta, Georgia,

Two years ago, Izabella Martinez, from Atlanta, Georgia, invested $1,000 by buying 125 shares ($8 per share NAV) in the Can’t Lose Mutual Fund, an aggressive growth no-load mutual fund. Last year, she...

Q: Several years have passed since the Johnsons were married, and their

Several years have passed since the Johnsons were married, and their financial affairs have become more complicated. They recently purchased a $200,000 condominium that has added only about $400 per m...

Q: Last year David McCullough of La Junta, Colorado, bought the

Last year David McCullough of La Junta, Colorado, bought the XYZ mutual fund, which has total assets of $240 million, liabilities of $10 million, and 15 million shares outstanding. (a) What is the net...

Q: Calculate the price-to-rent ratios for the following properties

Calculate the price-to-rent ratios for the following properties arranged by price of home followed by likely annual rental income: (a) $400,000/$40,000; (b) $300,000/$36,000; (c) $200,000/30,000.