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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,
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 29 Discount Bond 5.7% 7.2% 1000 B 21 Par Bond 2000 28 Premium Bond 9.0% 6.4% 3000 19 years 16 years 18 years Stocks: The financial manager wants to buy Stocks X, Y, Z and he decided to buy different numbers from each stock. Stock Number of Dividends Type Required Growth Dividends 0 Dividends 1 Stock Retum 2300 Zero Growth 11% 3.5 Y 2100 Constant 16% 3% 1.8 Growth Z 1900 Constant 12% 5% 2 Growth Calculate the total amount of investment the company needs to buy the 3 bonds and the 3 stocks. Total Amount =
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