Person X is ready to make his first investment. For the purpose of that he saved $10,000 and he has three alternative investment opportunities. In the first alternative, the par value of the bond is $1000 ,4.2% of interest and sells for $1115 and matures in the 4 th year. The second alternative is company B’s stock paying a dividend of $2.63 and selling for $26.25. The third alternative is company E vending stock for $60 with a par value of $5 and dividend of 1.88. The company E expected to grow in the predictable future. To determine: The person X should choose which investment.

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Chapter 8, Problem 2MC

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Person X is ready to make his first investment. For the purpose of that he saved $10,000 and he has three alternative investment opportunities. In the first alternative, the par value of the bond is $1000 ,4.2% of interest and sells for $1115 and matures in the 4^th year.

The second alternative is company B’s stock paying a dividend of $2.63 and selling for $26.25. The third alternative is company E vending stock for $60 with a par value of $5 and dividend of 1.88. The company E expected to grow in the predictable future.

To determine: The person X should choose which investment.

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