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1. Assume you bought 100 shares of JPM the beginning of last year at a price if $120 per share. JPM paid a dividend of
1. Assume you bought 100 shares of JPM the beginning of last year at a price if $120 per share. JPM paid a dividend of 2.25 last year and 2.45 this year. At the end of this year, you sell share at a prive of 126 per share. calculate the total dollar return amd the holding period return over the 2 year period.
$ Return? %Return ?
2. A company purchases a new piece of equipmemt for $175,000. for tax purposes, the company is permitted to depreciate the asset over a period of 7 years. if the tax rate is 40%, what is the cash flow benefit of the depeeciate charge in year 1?
3. Calculate the profe od a 5 year, 4.25% corporate bond that has a face value of 1000. Assime the risk free discount rate for all periods is 3.75% and the corporate bond trades at a spread if 115 basis points over the risk free asset.
Can sombody please explain how I solve these? Thank you!!
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