In this paper, please discuss the following case study. In doing so, explain you
ID: 2811478 • Letter: I
Question
In this paper, please discuss the following case study. In doing so, explain your approach to the problem, support your approach with references, and execute your approach. Provide an answer to the case study’s question with a recommendation.
A friend has confided in you that they have recently inherited a moderately sized investment portfolio from a relative. They don’t know what do with the assets, if anything. The friend comes to you for advice. Your immediate advice, of course, is for your friend to seek professional advice from a tax expert as well as a financial adviser. Your friend persists, however, and asks how the investment returns of the portfolio compare to other investments. You agree to review the portfolio and calculate the yields of each investment as well as determine the weighted average yield for the entire portfolio.
In this paper, refer to the investment schedule that is available below.
For your quantitative analysis compute the current market value of each security position of the portfolio, calculate individual yields based on current market pricing, and determine the weighted average factor and the weighted average yields.
Explain the basis upon which you determined the weighted average yield.
Explain the difference between a yield that is based on cost, as opposed to one that is based on current market value. What would be the different uses of both?
What non-quantitative observations can you make about the portfolio?
Papers will be assessed on the following criteria:
An explanation of how the weighted average yield was determined.
An explanation for the difference between a yield that is based on cost, as opposed to one that is based on current market value. The explanation discussed the different uses of both.
Non-quantitative observations about the portfolio are provided
Type of Investment Company Name Stock Symbol Portfolio Position (# of shares) Current Market Price Current Market Value Estimated Dividend/Interest Estimated Current Yield Weighted Average Factor Weighted Average Yield Common stock Altria MO 119 50.20 [___] $247.00 [___] [___] [___] Common stock AT&T T 173 32.65 [___] $325.00 [___] [___] [___] Common stock Chevron CVX 26 104.98 [___] $111.00 [___] [___] [___] Common stock Coca Cola KO 59 40.55 [___] $77.00 [___] [___] [___] Common stock Duke Energy DUK 65 76.78 [___] $206.00 [___] [___] [___] Common stock Johnson & Johnson JNJ 31 100.60 [___] $86.00 [___] [___] [___] Common stock McDonalds MCD 52 97.44 [___] $176.00 [___] [___] [___] Common stock Pepsi Cola PEP 17 95.62 [___] $44.00 [___] [___] [___] Common stock Philip Morris Intl PM 70 75.33 [___] $280.00 [___] [___] [___] Common stock Proctor & Gamble PG 52 81.94 [___] $133.00 [___] [___] [___] 0 Total Portfolio Market Value [___] Weighte Averatge Yield: [___]Explanation / Answer
Type of Investment
Company Name
Stock Symbol
Portfolio Position (# of shares)
Current Market Price
Current Market Value
Estimated Dividend/Interest
Estimated Current Yield
Weighted Average Factor
Weighted Average Yield
Common stock
Altria
MO
119
50.2
5973.8
$247.00
4%
119
4.920319
Common stock
AT&T
T
173
32.65
5648.45
$325.00
6%
173
9.954058
Common stock
Chevron
CVX
26
104.98
2729.48
$111.00
4%
26
1.057344
Common stock
Coca Cola
KO
59
40.55
2392.45
$77.00
3%
59
1.89889
Common stock
Duke Energy
DUK
65
76.78
4990.7
$206.00
4%
65
2.68299
Common stock
Johnson & Johnson
JNJ
31
100.6
3118.6
$86.00
3%
31
0.854871
Common stock
McDonalds
MCD
52
97.44
5066.88
$176.00
3%
52
1.80624
Common stock
Pepsi Cola
PEP
17
95.62
1625.54
$44.00
3%
17
0.460155
Common stock
Philip Morris Intl
PM
70
75.33
5273.1
$280.00
5%
70
3.716979
Common stock
Proctor & Gamble
PG
52
81.94
4260.88
$133.00
3%
52
1.623139
0
Total Portfolio Market Value
41079.88
664
Weighte Averatge Yield:
4%
Current Market Value- Market price*No. of shares
Estimated current yield= estimated dividend/current market value
Weighted avg factor are taken as the no. of shares ( can also be expressed as percentages)
Weighted avg yield = summation of ( weight factor*estimated current yield)/Total no. of shares
Type of Investment
Company Name
Stock Symbol
Portfolio Position (# of shares)
Current Market Price
Current Market Value
Estimated Dividend/Interest
Estimated Current Yield
Weighted Average Factor
Weighted Average Yield
Common stock
Altria
MO
119
50.2
5973.8
$247.00
4%
119
4.920319
Common stock
AT&T
T
173
32.65
5648.45
$325.00
6%
173
9.954058
Common stock
Chevron
CVX
26
104.98
2729.48
$111.00
4%
26
1.057344
Common stock
Coca Cola
KO
59
40.55
2392.45
$77.00
3%
59
1.89889
Common stock
Duke Energy
DUK
65
76.78
4990.7
$206.00
4%
65
2.68299
Common stock
Johnson & Johnson
JNJ
31
100.6
3118.6
$86.00
3%
31
0.854871
Common stock
McDonalds
MCD
52
97.44
5066.88
$176.00
3%
52
1.80624
Common stock
Pepsi Cola
PEP
17
95.62
1625.54
$44.00
3%
17
0.460155
Common stock
Philip Morris Intl
PM
70
75.33
5273.1
$280.00
5%
70
3.716979
Common stock
Proctor & Gamble
PG
52
81.94
4260.88
$133.00
3%
52
1.623139
0
Total Portfolio Market Value
41079.88
664
Weighte Averatge Yield:
4%
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