Answer to Question #157522 in Math for Angelie Suarez

Question

1. A stock pays an annual dividend of $1.02 per share. Calculate the dividends paid to a shareholder who has 375 shares of the company’s stock.

2. A bond with a face value of $6000 and a 4.2% coupon has a 5-year maturity. Find the annual interest paid to the bondholder.

Answer 1

1. The dividends paid to a shareholder who has 375 shares of the company’s stock are: 1.02×375 = $382.5.

2. If a bond with a face value of $6000 and a 4.2% coupon has a 5-year maturity, then the annual interest paid to the bondholder is 6000×0.042 = $252.