Joe Boyd Is Considering Whether to Buy Stocks or Bonds

question 73

Short Answer

Joe Boyd is considering whether to buy stocks or bonds. The stock he is looking at is trading at $43.50 with an annual dividend of $3.60. The bond is trading at 92.125 with an annual interest rate of 8 3/4%. Can you calculate for Joe his rate of return to the nearest hundredth percent for stocks and bonds? Which is the better rate of return?

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