1. **Problem Statement:** Complete the missing values in the Stocks and Bonds tables using the given financial formulas. --- ### Part A: Stocks 2. **Formulas and Rules:** - Current Yield $= \frac{\text{Annual Dividend per share}}{\text{Current Price per share}} \times 100$% - Price-Earnings Ratio $= \frac{\text{Current Price per share}}{\text{Earnings per share}}$ 3. **Calculations for Stocks:** - Row 1: - Given: Annual Dividend = 150, Current Price = 3750, P/E Ratio = 15:1 - Find Earnings per share (EPS): $$\text{EPS} = \frac{\text{Current Price}}{\text{P/E Ratio}} = \frac{3750}{15} = 250$$ - Find Current Yield: $$\text{Current Yield} = \frac{150}{3750} \times 100 = 4\%$$ - Row 2: - Given: EPS = 512, Current Price = 1250, Current Yield = 8% - Find Annual Dividend: $$\text{Annual Dividend} = \text{Current Yield} \times \text{Current Price} = 0.08 \times 1250 = 100$$ - Find P/E Ratio: $$\text{P/E Ratio} = \frac{1250}{512} \approx 2.44$$ - Row 3: - Given: EPS = 100, Current Yield = 10%, P/E Ratio = 40:1 - Find Annual Dividend: $$\text{Annual Dividend} = 0.10 \times \text{Current Price}$$ - Find Current Price: $$\text{Current Price} = \text{EPS} \times \text{P/E Ratio} = 100 \times 40 = 4000$$ - Calculate Annual Dividend: $$\text{Annual Dividend} = 0.10 \times 4000 = 400$$ - Row 4: - Given: Annual Dividend = 140, Current Price = 1750, P/E Ratio = 35:1 - Find EPS: $$\text{EPS} = \frac{1750}{35} = 50$$ - Find Current Yield: $$\text{Current Yield} = \frac{140}{1750} \times 100 = 8\%$$ - Row 5: - Given: EPS = 383, Annual Dividend = 900, Current Yield = 12% - Find Current Price: $$\text{Current Price} = \frac{900}{0.12} = 7500$$ - Find P/E Ratio: $$\text{P/E Ratio} = \frac{7500}{383} \approx 19.6$$ --- ### Part B: Bonds 4. **Formulas and Rules:** - Coupon Payment $k = \frac{\text{Bond Rate} \times \text{Redemption Value}}{\text{Number of payments per year}}$ - Payment frequency conversions: - Bimonthly = 6 payments/year - Quarterly = 4 payments/year - Annually = 1 payment/year 5. **Calculations for Bonds:** - Row 1: - Given: Coupon Payment = 7.50, Bond Rate = 18%, Payment frequency = Bimonthly (6/year) - Find Redemption Value: $$7.50 = \frac{0.18 \times F}{6} \Rightarrow F = \frac{7.50 \times 6}{0.18} = 250$$ - Row 2: - Given: Redemption Value = 680, Bond Rate = 11%, Payment frequency = Quarterly (4/year) - Find Coupon Payment: $$k = \frac{0.11 \times 680}{4} = 18.7$$ - Row 3: - Given: Redemption Value = 900, Bond Rate = 12.8%, Payment frequency = Quarterly (4/year) - Find Coupon Payment: $$k = \frac{0.128 \times 900}{4} = 28.8$$ - Row 4: - Given: Redemption Value = 1300, Bond Rate = 12%, Payment frequency = Bimonthly (6/year) - Find Coupon Payment: $$k = \frac{0.12 \times 1300}{6} = 26$$ - Row 5: - Given: Coupon Payment = 105, Bond Rate = 15%, Payment frequency = Annually (1/year) - Find Redemption Value: $$105 = 0.15 \times F \Rightarrow F = \frac{105}{0.15} = 700$$ --- **Final answers:** - Stocks: 1. 250 2. 4% 3. 100 4. 2.44 5. 400 6. 4000 7. 50 8. 8% 9. 7500 10. 19.6 - Bonds: 11. 250 12. 18.7 13. 28.8 14. 26 15. 700