1. Look up Allergan PLCs (AGN) cumulative convertible Series A preferred stock. You will find this information...
Question:
1. Look up Allergan PLC’s (AGN) cumulative convertible Series A preferred stock. You will find this information on Yahoo! Finance (AGN-PA) or on Morningstar.com (AGNPRA).
a. What is the preferred’s current stock price?
b. What is its yield?
2. Look up Allergan PLC’s 4.625% fixed-coupon debt maturing on October 1, 2042. You will find this information on Morningstar.com. At the company’s overview screen, just click the “Bonds” tab, and you will see its various debt issues.
a. What is the bond’s yield to maturity?
b. What is the difference in the two securities’ yields? Which security has the higher yield? What explains this situation?
c. If you were a corporation in the top marginal tax bracket (35%) that had invested in Allergan’s preferred stock, what would be your after-tax return?
d. If you were a corporation in the top marginal tax bracket (35%) that had invested in Allergan’s 4.625% fixed-coupon debt maturing on October 1, 2042, what would be your after-tax return?
3. Look up the Tesla Motors’s (TSLA) convertible bond issues through the FINRA Bond Center page (finramarkets. morningstar.com/BondCenter/). Do a quick search by selecting “Search,” entering Tesla in the “Issuer Name” dialog box, and selecting “Show Results.” Now answer the following questions:
a. How many Tesla Motors’ bond issues are shown?
b. What are the price, coupon rate, bond rating, and yield to maturity of the issue with a March 1, 2021, maturity?
c. What is the price, coupon rate, Fitch bond rating, and yield to maturity of the issue with a March 1, 2022, maturity?
Note that you can do more advanced searches from this site looking for senior, industrial, non-convertible corporate bonds with different bond ratings, and the like. You might want to practice using the more advanced search option to see how it works.
4. Look up the quotation for the iShares U.S. Preferred Stock ETF (PFF) on Yahoo! Finance.
a. What is its current price?
b. What is the net asset amount in the fund?
c. What is the fund’s year-to-date return?
d. What has the fund’s average trading volume been over the past 3 months?
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
1 a The current stock price of All er gan P LC s AG N cumulative convertible Series A preferred stoc...View the full answer
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
