Answer Happy

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 cach bond. All bonds pay annual coupon Bond Number of Type Coupon YTM Maturity Face Bonds rate Value A 16 Discount 4.9% 7.5% 15 years 1000 Bond B 26 Par Bond 12 years 3000 с 18 Premium 10.6% 5.7% 15 years 2000 Bond 1 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 Required Growth Dividends Dividends Stock Type Return 0 Х 1600 Zero 16% 3.8 Growth Y 2600 Constant 10% 2% 1.8 Growth Z 2300 Constant 2 13% 2% Growth Calculate the total amount of investment the company needs to buy the 3 bonds and the 3 stocks. Total Amount