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    Dividend Per Share (Common) Total Preferred Dividend Number of Shares Total Common Dividend Total Dividend

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    Trisha Gadogdog
    1) Formulas are provided for calculating dividend per share for common and preferred stock, current yield on bonds, pricing bonds, and compound interest on bonds. 2) An example shows how to calculate dividend per share for common stock given total dividend and number of shares. 3) Another example demonstrates calculating current yield on a bond purchased at face value given the bond's face value, interest rate, and purchase price.

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    Dividend Per Share (Common) Total Preferred Dividend Number of Shares Total Common Dividend Total Dividend

    Uploaded by

    Trisha Gadogdog
    27 views8 pages
    1) Formulas are provided for calculating dividend per share for common and preferred stock, current yield on bonds, pricing bonds, and compound interest on bonds. 2) An example shows how to calculate dividend per share for common stock given total dividend and number of shares. 3) Another example demonstrates calculating current yield on a bond purchased at face value given the bond's face value, interest rate, and purchase price.

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    Additional-lesson.pptx

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    1) Formulas are provided for calculating dividend per share for common and preferred stock, current yield on bonds, pricing bonds, and compound interest on bonds. 2) An example shows how to calculate dividend per share for common stock given total dividend and number of shares. 3) Another example demonstrates calculating current yield on a bond purchased at face value given the bond's face value, interest rate, and purchase price.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    27 views8 pages

    Dividend Per Share (Common) Total Preferred Dividend Number of Shares Total Common Dividend Total Dividend

    Uploaded by

    Trisha Gadogdog
    1) Formulas are provided for calculating dividend per share for common and preferred stock, current yield on bonds, pricing bonds, and compound interest on bonds. 2) An example shows how to calculate dividend per share for common stock given total dividend and number of shares. 3) Another example demonstrates calculating current yield on a bond purchased at face value given the bond's face value, interest rate, and purchase price.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    FORMULAS USED IN STOCKS:

    𝑡𝑜𝑡𝑎𝑙 𝑐𝑜𝑚𝑚𝑜𝑛 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑


    Dividend per share (common) =
    𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 ( 𝑐𝑜𝑚𝑚𝑜𝑛)

    Total preferred dividend = number of shares x


    dividend per share
    Total common dividend = total dividend ---
    total preferred dividend
    Dividend per share (preferred) = par value x dividend rate
    Example: The AUS Enterprises 500,000 shares of common stock
    outstanding. If the dividend of 12, 900,000 was declared by the
    company directors last year, what is the dividend per share of
    common stock?
    Solution:
    12,900,000
    Dividend/share(common) = = 25.80 per share
    500,000
    𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
    Current Yield of Bond =
    𝑃𝑟𝑖𝑐𝑒 𝑜𝑓 𝐵𝑜𝑛𝑑
    Example: What is the current yield of a bond whose face value
    is 14,500 and pays a yearly interest of 12% if purchased at face
    value at 13,920?
    Solution:
    0.12 (14,500)
    Current Yield = = 12.5%
    13,920
    Formula for BOND
    1 −( 1+𝑖)−𝑛
    P = V( 1 + 𝑖 )−𝑛 + k
    𝑖
    V- redemption value of a bond
    b-periodic bond interest rate
    F-face value or par value of the bond
    P-price of the bond
    r-bond rate
    k-coupon payment
    j- nominal interest rate
    m-number of conversion period per year
    t – time period (term) of the loan or investment
    i- periodic interest rate
    k= Fb
    Coupon payment = face value x periodic bond
    interest rate
    Example: A 3,200 at 9% bond pays coupons quarterly and will
    be redeemed on July 7, 2016. Find the price if the bond is
    bought on July 7, 2012 to yield 8% compounded quarterly if
    the bond is redeemable at par, and if the bond is redeemable
    at 110%.

    Solution:
    𝑟 .09
    V = 3,200 m= 4 b = = = 0.0225 j =8%
    𝑚 4
    𝑗 .08
    r = 9% i= = = 0.02 t = 4 years n= tm = 4(4) =16
    𝑚 4
    k = Fb = 3,200(.0225) = 72
    1 −( 1+𝑖)−𝑛
    −𝑛
    P = V( 1 + 𝑖 ) + k
    𝑖
    1 −( 1+0.02)−16
    −16
    = 3200 (1 + 0.02) + 72
    0.02
    = 3200(0.7284458137) + 72(13.57770931)
    = 2331.026604 + 977.5950706
    = 3,308.62 – price of the bond
    At 110% redemption means
    V = 3200(1.10) = 3,520
    −𝑛 1 −( 1+𝑖)−𝑛
    P = V( 1 + 𝑖 ) + k
    𝑖
    = 3,520(0.7284458137) + 72(13.57770931)
    = 3, 541.72 –price of the bond

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