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Summary 5111WrittenAssignmentUnit4.docx BUS 5111 Written Assignment Unit 4 “ Yields And Weighted Average Yields University of the People BUS 5111 In order to help our friend understand the investment returns he has inherited, we are going to calculate the $4.99
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Summary 5111WrittenAssignmentUnit4.docx BUS 5111 Written Assignment Unit 4 “ Yields And Weighted Average Yields University of the People BUS 5111 In order to help our friend understand the investment returns he has inherited, we are going to calculate the
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5111WrittenAssignmentU BUS 5111 Written Assignment Unit 4 “ Yields And Weighted Average Yields University of the People BUS 5111 In order to help our friend understand the investment returns he has inherited, we are going to calculate the yield of each investment and the weighted average y...
5111writtenassignmentunit4docx bus 5111 written assignment unit 4 “ yields and weighted average yields university of the people bus 5111 in order to help our friend understand the investment r
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Running head: YIELDS AND WEIGHTED AVERAGE YIELDS
1
BUS 5111
Written Assignment Unit 4 – Yields And Weighted Average Yields
University of the People
BUS 5111
In order to help our friend understand the investment returns he has inherited, we are going to
calculate the yield of each investment and the weighted average yield. According to the
investment schedule provided, we will calculate the current market value of the stock which
will help us to figure out the estimated current yield. Then we will compute the weighted
average factor which will hopefully lead us to the weighted average yield. We will use excel
in this analysis.
Current Market Value
The current market value is the approximate current resale value for a financial instrument.
The current market value offers interested parties a price for which they can enter into a
transaction. The current market value is related to an asset's liquidity, which is the ease of
which an asset can be converted from an investment into cash (Kenton, 2020). The excel
sheet lists all the inherited stocks, the number of shares, and the current market price of each
share. The current market value is calculated by multiplying the current market price with the
number of shares.
Current market value = number of shares x current market price
The current market value of the common stock from Altria, MO = 119 x $50.04 = $5,954.76
, YIELDS AND WEIGHTED AVERAGE YIELDS
2
The rest of the calculations are shown on the attached excel sheet.
The total portfolio market value is the sum of the current market values of each of the shares.
Estimated Current Yield
The current yield is an investment's annual income (interest or dividends) divided by the
current price of the security. This measure examines the current price of a bond, rather than
looking at its face value. The current yield represents the return an investor would expect to
earn if the owner purchased the bond and held it for a year (Chen, 2020). The excel sheet
gives the estimated dividend or interest for each of the stocks. It is assumed that the given
value is the total dividend for each type of investment.
Estimated Current Yield = estimated dividend or interest divided by current market value
Estimated current yield of the common stock from Altria, MO = (247/5954.76)x100 =
4.15%
The rest of the results are shown in column H in the attached table.
Weighted Average Factor
In mathematical terms, a factor is any of the numbers multiplied together to form the product
of a multiplication problem. Weighting numbers allows you to give more importance to one
number over another number (McBride, 2017). For example, our grades in this course are
computed using a weighted average. If one assignment is worth 40 percent of the final grade
and another worth 60 percent, calculating weighted factors ensures the accurate amount of a
particular score counts toward the final grade. A weighted average is preferred to a simple
arithmetic average.
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