Finance

Common Stockholder

Michael Williams

BUS/401

Daniel Brogan
February 5, 2012

Common Stockholder

I have last saved $10,000 and ready to make my very first set upment. provided I only have three alternatives for investing my money. My needed rates of pass on for the these investments are; 6 percent for the bond, 7 percent for the preferred stock, and 15 percent for the common stock.
upper-case letter Cities ABC
Capital Cities ABC, Inc. bonds with a par value of $1,000, that pays an 8.75 percent on its par value in interest, sells for $1,314, and matures in 12 social classs. regulate of flow is 6%.
Preferred stock:
anticipate kick the bucket = dividends/stock determine = $1,314/$1,000= 0.7610 or 0.07%
Common stock;
Expected return = dividends in year 1/stock price + growth rate
= $1,314(1+8.75) + 15% = $1,314/$1,000 + 15%
= 7.6% + 15% = 0.006%

southwestern United States Bancorp
Southwest Bancorp preferred stock paying a dividend of $2.50 and exchange for $25.50. revert on Investment is 7%.
Preferred stock
Expected return = dividends/stock price = $2.50/$25.50 = 9.8%

Emerson Electric: Emerson Electric, common stock selling for $36.75, with a par value of $5. The stock recently compensable a $1.



32 dividend and the firms earnings per share has change magnitude from $1.49 to $3.06 in the past five years. The firm expects to grow at the same rate for the foreseeable future. Required rate of return is 15%.
Common stock
Expected return = dividends in year 1/stock price + growth rate
= $1.32(1 + 0.04) + 4% = $1.32/$36.75 + 4%
= 0.03 + 4% = 0.0007 or 7%
After analyzing, and doing some counting on these important investments I have decided to invest my money with Southwest Bancorp. This decision was made base on the price of the stock, and how much of the return on investment would be. this instant assuming...If you want to get a full essay, order it on our website: Orderessay



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