School Versus Work
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School Versus Work School Versus WorkThe school you would like to attend costs $100,000. To help finance your education, you need to choose whether or not to sell your 1,000 shares of Apple stock, 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five years from their 30-year maturity date, or a combination of both. Provide the appropriate data and calculations that you would perform to make this decision.My answer:In this case the bonds are 1000 dominated in $100, (1000 Ã 100) and matures in 5 years. The coupon will be 4.25, meaning that they pay 0.0425 Ã 100,000= 4,250 for each year but in year 5, you will receive 104,250 (100,000 + 4250 when the bond matures). Most bonds pay coupons and in the final year pays the principal.Bond cash flowYear 1 = $ 4,250Year 2 = $4,250Year 3 = $4,250Year 4 = $4,250Year 5 = $104,250 (100,000+4,250)Total Cash = $121,250 (will be in 5 years)What are the advantages and disadvantages of selling a combination of stocks and bonds? Be sure to support your answers.C. Suppose that you choose to sell your stocks, bonds, or a combination of both. What is your choice, and what is your financial reasoning behind this choice? Consider supporting your answer with quantitative data.D. Suppose that you choose to accept the job. What is your financial reasoning behind this choice? Be sure to support your answer with quantitative data.