# Valuing Bonds and stocks assignment help

Looking for some serious help in Financial Management assignment.  I needed honest and willing to meet my dead line.  Instruction as following questions using grammatically correct language and appropriate APA citations. All questions need to be answer and with APA citations. All material MUST come from the book only. (The book that used is Finance by Cornett, Adair, & Nofsinger, 2016).  Chapter 7 Valuing Bonds, Pages 160-189 this chapter covers bond features and types of bon, bond valuation, bond pricing and how interest rates affect bond prices and Chapter 8 Valuing stocks, page 190-215.  This chapter covers various components of stock returns and stock valuation.. There are some hints/suggestions for certain questions in this assignment

Question 1:

Proficient-level: “What does a call provision [call feature] allow [bond] issuers to do, and why would they do it?” (Cornett, Adair, & Nofsinger, 2016. p. 184).

Distinguished-level: State what additional compensation is paid, in addition to the bond principal, when a bond is called.

Question 2:

Proficient-level: “Provide the definitions of a discount bond and premium bond. Give examples” (Cornett, Adair, & Nofsinger, 2016, p. 184).

Distinguished-level: Explain why market interest changes are reflected in bond prices.

Question 3:

Proficient-level: “Describe the differences in interest payments and bond prices between a 5 percent coupon bond and a zero coupon bond” (Cornett, Adair, & Nofsinger, 2016, p. 184).

Distinguished-level: Given a change in market interest rates, determine which of the two bonds would remain closer to its par value.

Question 4: HINT-The correct price (present value) of the bond will fall between the range of \$470.00 and \$479.99.  (REMINDER you are also required to identify the known variables use.

Proficient-level: “Calculate the price of a zero coupon bond that matures in 20 years if the market interest rate is 3.8 percent” (Cornett, Adair, & Nofsinger, 2016, p. 185).

Assume semi-annual compounding.

Distinguished-level: State why zero coupon bonds are sold at steep discounts.

Question 5: HINT- The correct price (present value) of the bond will fall between the range of \$690.00 and \$699.99 (REMINDER you are also required to identify the known variables used.

Proficient-level: “Compute the price of a 3.8 percent coupon bond with 18 years left to maturity and a market interest rate of 6.8 percent” (Cornett, Adair, & Nofsinger, 2016). Assume interest payments are paid semi-annually, and solve using semi-annual compounding.

Distinguished-level: Explain why the bond is either a discount bond or a premium bond.

Question 6: HINT- The correct yield to maturity (I) of the bond will fall between the range of 5.00% and 5.99%.  BE SURE TO SOLVE AND SHOW RESPONSE OUT TO FOUR DECIMAL PLACES AS I HAVE SHOW IN THE RANGES AMOUNTS.  REMINDER YOU ARE ALSO REQUIRED TO IDENTIFY THE KNOWN.

Proficient-level: “A 5.65 percent coupon bond with 18 years left to maturity is offered for sale at \$1,035.25. What yield to maturity [interest rate] is the bond offering?” (Cornett, Adair, & Nofsinger, 2016, p. 186). Assume interest payments are paid semi-annually, and solve using semi-annual compounding.

Distinguished-level: Explain what effect a decrease in the offered sales price would have on the yield to maturity

Question 7:

Proficient-level: “As owners, what rights and advantages do shareholders obtain” (Cornett, Adair, & Nofsinger, 2016, p. 211)?

Distinguished-level: Describe the disadvantages to owning stock.

Question 8:

Proficient-level: “Why might the Standard and Poor’s 500 Index be a better measure of stock market performance than the Dow Jones Industrial Average?” (Cornett, Adair, & Nofsinger, 2016, p. 211).

Distinguished-level: Explain how the Dow Jones Industrial Average is more popular than the Standard and Poor’s 500.

Question 9:

Proficient-level: “What are the differences between common stock and preferred stock?” (Cornett, Adair, & Nofsinger, 2016, p. 211).

Distinguished-level: Describe the similarities between common stock and preferred stock.

Question 10: HINT-the text does not show a specific equation to solve this problem; however, the problem can be solved using a simple formula:  FV= PV x (1+i).

Proficient-level: “On May 19, 2015, the Dow Jones Industrial Average set a new high. The index closed at 18,312.39, which was up 13.51 points from the previous day’s close of 18,298.88. What was the return (in percent to four decimal places) of the stock market for May 19, 2015?” (Cornett, Adair, & Nofsinger, 2016).

Distinguished-level: Identify the three most recognized U.S. market indexes.

Question 11: HINTThe correct purchase amount of the Time Warner stock will fall between the range of 0.0001 (= 0.01%) and 0.0009 (=0.09%).  Be SURE TO SOLVE ANS SHOW RESPONSE OUT TO FOUR DECIMAL PLACES.  REMINDER YOU ARE REQUIRED TO IDENTIFY THE KNOWN.

Proficient-level: “At your brokerage firm, it costs \$9.50 per stock trade. How much money do you need to buy 300 shares of Time Warner, Inc. (TWX), which trades at \$22.62?” (Cornett, Adair, & Nofsinger, 2016).

Distinguished-level: Based on the amount of commission paid, state whether a traditional full-service broker or a discount broker is being used.

Question 12: HINT- The correct value of Safeco stock in the DISTINGUISHED level (Using the 9% growth rate) is \$31.97 per share.  (REMINDER YOU REQUIRED TO IDENTIFY THE KNOWN.

Proficient-level: “Financial analysts forecast Safeco Corporation (SAF) growth for the future to be a constant 8 percent. Safeco’s recent dividend was \$0.88. What is the value of Safeco stock when the required return is 12 percent?” (Cornett, Adair, & Nofsinger, 2016, p. 213).

Distinguished-level: Re-calculate the value of stock, assuming a one percent increase in the growth rate.

Question 13: HINT- The correct value of the Duquesne Light Company preferred stock will fall between the range of \$50.00 and \$54.99 per share.  (REMINDER YOU ARE ALSO REQUIRED TO IDENTIFY THE KNOWN

Proficient-level: “A preferred stock from Duquesne Light Company (DQUPRA) pays \$3.55 in annual dividends. If the required return on the preferred stock is 6.7 percent, what is the value of the stock?” (Cornett, Adair, & Nofsinger, 2016, p. 213).

Distinguished-level: Explain why the growth rate of preferred stock is 0%.

Question 14: HINT- The correct stock price of Ultra Petroleum will fall between the range of \$50.00 and \$51.99 per share.  (REMINDER YOU ARE ALSO REQUIRED TO IDENTIFY THE KNOWN

Proficient-level: Ultra Petroleum (UPL) has earnings per share of \$1.56 and a P/E ratio of 32.48. What is the stock price?” (Cornett, Adair, & Nofsinger, 2016, p. 213).

Distinguished-level: Explain how the P/E model computes what is referred to as the stock’s relative value.

Question 15:

Chapter 7 in the M: Finance textbook by Cornett, Adair, and Nofsinger provides an introduction to the main concepts of bonds and bond valuations. Bond concepts are important in finance, because the bond market is vital to finance and actually comprises a larger market than does the stock market. Review Chapter 7, with particular emphasis on the “Bond Market Overview” and “Credit Risk” sections

-Describe the different reasons that the U.S. government, local governments, and corporations might issue bonds.

-One company has issued two bond classes. One issue is a mortgage bond and the other is a debenture. Which issue will have a higher bond rating and which issue will offer a higher yield? Why?

-If you were purchasing bonds, would you prefer debentures or mortgage bonds? Why