1. Oregon Co. issued $1,000 par value bonds with a 4% coupon rate, convertible into 20 share of Oregon common stock. If the market price of the bond is $1,200 and the stock is now at $45 per share and pays a $0.50 per share annual dividend. What is this bond’s payback period?
16.67 years
12.28 years
10.00 years
14.41 years
2. On May 1, 2016, Sandra purchased 100 shares of AAA stock at a total cost of $2,000. She received a total of $150 in dividends and sold the stock for $2,280 on May 15, 2017. Sandra has a combined state and federal marginal tax rate of 28%. Her tax rate on both long-term capital gains and dividend income is 15%. What is Sandra's after-tax holding period return on her investment in AAA stock?
15.48%
21.50%
16.05%
18.28%