Your client comes to you with the following bond portfolio and wants to know which bonds that

Question:

Your client comes to you with the following bond portfolio and wants to know which bonds that he / she should sell to buy into a high quality dividend strategy that is currently producing a 3% yield. Note that the yield to maturity of the bond that you would sell has to be lower than the strategy that you are moving into.

Please issue a memo to the client outlying your considerations and your recommendation.

Description Coupon Par Value Current Price Maturity

Ohio State School District (Denton) 5.00% $100,000 $109.998 8/15/2021

Ohio State School District (General) 5.00% $70,000 $109.047 3/15/2016

Energy North Washington Electric 5.50% $80,000 $108.398 7/01/2016

Florida State Turnpike Authority 5.00% $80,000 $107.978 7/01/2016

IPS Multi-School Building 5.25% $125,000 $107.878 7/15/2025

Ohio Muni Electric Generation 5.00% $75,000 $103.999 2/15/2023

Orlando-Orange Expressway 5.00% $100,000 $107.476 7/01/2015

South Carolina Transportation 5.25% $90,000 $109.766 10/1/2017

Virginia Building Education 5.00% $100,000 $100.204 7/01/2014

Virginia Transportation 5.00% $75,000 $110.611 5/15/2016

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...