Short term investment decisions task workbook

Short-term investment decisionsWorkBook(Task)Bachelor’s Degree in Finance and BankingShort-term investment decisionsInstructions: Read the following case carefully and do what is requested.The company Textiles de México has a surplus of cash for $ 50,000 USD that it wants to invest in shortterminstruments, in order for that money togenerate returns over time. According to a financial analysis and withthe cash budget, the company can invest it for 10 years.Felipe, the finance manager, has foundtwo ways to make the investment. The first consistsof ordinarysharesof a utility company; the cost of each share is $25 USD and the dividends theyoffer, also per share,are $2USD for a year (a dividend yield of8%). These dividends will be taxed at the same rates that apply to longtermcapitalgains. Felipe expects the value of these shares to increase by 10%.The other way is through a high-qualitycorporatebond, which iscurrently sold at a face value of $1,250USD,which gives an annual interest rate of7% or $70 USD for every $1,000 invested. After 10years, the bondswill be repaid at their payrollvalue.Suppose the company does not reinvest the annual income generated by the … Purchase document to see full attachment

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