Company OMEGA wants to invest in Bonds and Stocks. The financial manager was looking at different types of Bonds and Stocks. After studying the market, he decided to choose 3 bonds and 3 stocks. Given the following information:

Bonds: The financial manager wants to buy bonds A, B, C and he decided to buy different numbers from each bond. All bonds pay annual coupon

Bond

Number of Bonds

Type

Coupon rate

YTM

Maturity

Face Value

A

16

Discount Bond

5.7%

8.5%

15 years

2000

B

24

Par Bond

19 years

2000

C

22

Premium Bond

10.9%

6.9%

19 years

3000

Stocks: The financial manager wants to buy Stocks X, Y, Z and he decided to buy different numbers from each stock.

Stock

Number of Stock

Dividends Type

Required Return

Growth

Dividends 0

Dividends 1

X

1800

Zero Growth

12%

3.8

Y

1600

Constant Growth

15%

6%

1.8

Z

2600

Constant Growth

11%

5%

2

Calculate the total amount of investment the company needs to buy the 3 bonds and the 3 stocks.

Total Amount =