第七版博迪投资学答案.doc

CHAPTER 2: ASSET CLASSES AND
FINANCIAL INSTRUMENTS
1. (d)
2. The equivalent taxable yield is: %/(1 ? ) = %
3. (a) Writing a call entails unlimited potential losses as the stock price rises.
4. a. You would have to pay the asked price of:
94:30 = % of par = $
b. The coupon rate is % implying coupon payments of $ annually or, more precisely, $ semiannually.
c. Current yield = (Annual coupon e/price)
= $/$ = = %
5. Preferred stock is like long-term debt in that it typically promises a fixed payment each year. In this way, it is a perpetuity. Preferred stock is also like long-term debt in that it does not give the holder voting rights in the firm.
Preferred stock is like equity in that the firm is under no contractual obligation to make the preferred stock dividend payments. Failure to make payments does not set off corporate bankruptcy. With respect to the priority of claims to the assets of the firm in the event of corporate bankruptcy, preferred stock has a higher priority mon equity but a lower priority than bonds.
6. Money market securities are called ¡°cash equivalents¡± because of their great liquidity. The prices of money market securities are very stable, and they can be converted to cash (., sold) on very short notice and with very low transaction costs.
7. P = $10,000/ = $9,
8. The total before-tax e is $4. After the 70% exclusion for preferred stock dividends, the taxable e is: ¡Á $4 = $
Therefore, taxes are: ¡Á $ = $
After-tax e is: $ ¨C $ = $
Rate of return is: $/$ = %
9. a. General Dynamics closed today at $, which was $ higher than yesterday¡¯s price. Yesterday¡¯s closing price was: $
b. You could buy: $5,000/$ = shares
c. Your annual dividend e would be: ? $ = $
d. The price-to-earnings ratio is 16 and the price is $. Therefore:
$ per share = 16