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Favorable the treasury bond or the trading stock

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Reference no: EM132546629

If the market price of a treasury bond is currently $1100 per unit and the stock of a company is trading at $10 per share, which investment should be taken to raise funds necessary for a project/campaign, please assist how I can determine which is more favorable the treasury bond or the trading stock and why?

Treasury Bond has a face value of $1000, 10 years to maturity, annual coupons of $50 and yield to maturity is 4% per year

ABC ordinary shares, just paid a dividend of $0.50 per share. With dividend growth prospects of 5% per year and required rate of return at 10%

Reference no: EM132546629

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