Final Exam Review Maria Segovia purchased 100 shares of JAX stock for 30 per share and sold this same stock three years later for 35 per share She paid commissions of 50 when she purchased the stock and 45 when she sold the stock Dividends of 2 per share were paid each year Use this information to answer the following three questions 1 The total dollar return on this stock transaction was Sell price 35 100 3 500 45 3 455 Dividends 2 100 3 600 Purchase price 30 100 3 000 50 3 050 3 455 600 3 050 a 405 b 3455 c 605 d 1005 2 What is your total cumulative return in percent over the 3 year period Sell price dividends purchase price 1 3 455 600 3 050 1 32 1 a 32 95 b 19 84 c 13 28 d 44 50 3 What is your average annual percentage return over the three year period PV 3050 FV 3455 N 3 years Pmt 200 YEARLY I a 23 2 b 11 6 c 10 5 d 9 3 4 Assume you are in the 28 marginal tax bracket dividends and long term capital gains will be subject to a 15 tax rate What is your after tax average annual return Capital gain 3455 3050 405 15 60 75 200 1 15 170 a b c d 10 5 9 02 5 5 4 3 5 If inflation averaged 3 4 per year over the three year period the average annual after tax real rate of return would be 1 0902 1 034 1 0544 1 5 4 a 5 4 b 6 9 c 2 0 d 0 87 Cur Yld Bonds Mobile 8s33 8 2 Vol Close 53 Use the above information to answer the next five questions 22 What year does the bond mature a 2033 b 2008 c 2009 d 2040 23 What is the bond s annual coupon payment a 32 b 80 c 8 d 82 24 What is the bond s closing price a 970 00 b 975 61 c 1 000 00 d 1 100 13 25 What was yesterday s closing price a 1 006 86 b 1 001 25 c 938 75 d 944 36 26 What is the bond s YTM 8 2 Net Chg 3 1 8 Use the above information to answer the next few questions 52W 52W Ticker Div 51 25 27 69 ROK Yield 2 15 Vol Net P E 00s High Low Close 14 5 6412 47 99 47 00 47 54 Chg 0 24 28 What is the lowest the stock has sold for in the past year a b c d 47 00 51 25 47 99 27 69 29 What is the closing price of ROK a 47 00 b 51 25 c 47 99 d 47 54 30 What is the annual dividend payment per share a 2 15 b 1 02 c 102 21 d 5 00 31 What was the previous day s closing price a 47 78 b 47 30 c 47 24 d 51 49 32 What is the EPS for ROK a 4 77 b 4 30 c 3 28 d 3 53 33 Solely looking at ROK s P E ratio what does this possibly tell you about the price of the stock a ROK stock is undervalued b ROK stock is valued fairly c ROK stock is overvalued d ROK stock may be subject to a speculative bubble 34 Google has a beta of 0 98 If the market as a whole goes up 15 percent we would expect Google s market value to go a up 15 percent b down 15 percent c up 14 70 percent d down 14 70 percent 35 A taxable bond would have to yield percent to equal a 5 8 percent municipal bond for someone with a 31 percent marginal tax rate a b c d 18 7 12 2 8 4 7 6
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