Being a financially literate Lasallian student, if you could wake up tomorrow and received two (2) million
Question:
Being a financially literate Lasallian student, if you could wake up tomorrow and received two (2) million pesos from your parent, siblings, and relatives as their graduation gift, what will you do on that large amount of money? Justify your actions and infuse the concepts you have learned from all of the following topics:
a. Basic Long-Term Financial Concepts
b. Introduction to Investments
c. Managing Personal Finance
2. After receiving the two million pesos as graduation gift, you decided to invest the whole two million in an investment that will give you greater benefits. As investor, you are evaluating the following investment opportunities for your money amounting to two (2) million pesos.
Investment Option 1: Purchase 80,000 Jollibee Foods Corporation Common Stocks for Php 2,000,000. Dividends to be received are expected at Php 4.00 per share and at the end of the next 5 years, the stock is expected to be selling at 115% of its present price.
Investment Option 2: Purchase 2,000, Php 1,000-Bond of San Miguel Corporation for Php 2,000,000. Nominal Interest rate is 14% per year. The bond is to be redeemed at 150% after 5 years.
Additional Information: The acceptable effective interest rate of investment is 12% and income tax is 40%. Capital Gain tax is ignored.
Question:
(a) Which of those investment opportunities you will choose? Why?
(b) Or will it be better if you will invest Php 1,000,000 each for both Investment 1 and Investment 2? Justify your answer.
Being a financially literate Lasallian student, if you could wake up tomorrow and received two (2) million pesos from your parent, siblings, and relatives as their graduation gift, what will you do on that large amount of money? Justify your actions and infuse the concepts you have learned from all of the following topics:
a. Basic Long-Term Financial Concepts
b. Introduction to Investments
c. Managing Personal Finance
2. After receiving the two million pesos as graduation gift, you decided to invest the whole two million in an investment that will give you greater benefits. As investor, you are evaluating the following investment opportunities for your money amounting to two (2) million pesos.
Investment Option 1: Purchase 80,000 Jollibee Foods Corporation Common Stocks for Php 2,000,000. Dividends to be received are expected at Php 4.00 per share and at the end of the next 5 years, the stock is expected to be selling at 115% of its present price.
Investment Option 2: Purchase 2,000, Php 1,000-Bond of San Miguel Corporation for Php 2,000,000. Nominal Interest rate is 14% per year. The bond is to be redeemed at 150% after 5 years.
Additional Information: The acceptable effective interest rate of investment is 12% and income tax is 40%. Capital Gain tax is ignored.
Question:
(a) Which of those investment opportunities you will choose? Why?
(b) Or will it be better if you will invest Php 1,000,000 each for both Investment 1 and Investment 2? Justify your answer.
Expert Answer:
Answer Receiving a substantial amount of money like two million pesos is an opportunity that requires careful consideration and planning Heres what I would do and how I would justify my actions based ... View the full answer
