FINC 330
FINC 330
Project 2
Bond Performance
Symbol Coupon Rate Maturity Date Callable Last Trade Last Trade Last Trade
Price Yield Date
2.60% 07/15/2022 Yes 102.15 .327% 04/30/2021
EBAY3879365
EBAY3879390 4.00% 07/15/2042 yes $107.73 3.473% 04/30/2021
The last prices of the two bonds were $102.15 and $107.73. Assuming the par value of
the bond is $1000, the investor will pay $1022.67 and $1078.11 for the bonds. Multiplying the
par value by the coupon rate shows the annual coupon interests payments would be $26 and $40.
Using a financial calculator, the current yields were determined as 25.45% for the one year bond
and 37.13% for the second bond that matures in 21 years..
The EBAY3879390 bond would be a better investment because it is callable and has the
ability to improve, but the investment can be rescinded if the bond seems to descend into a loss
and the investor is no longer comfortable with investing. Both bonds analyzed are callable, as
are most bonds that eBay offers. This would be beneficial for a company like eBay who does not
have a substantial history guaranteeing success or for a first time investor that is worried about
suffering major losses.
eBay’s current ratio, 1.80, indicates they are very liquid and would not have issues
paying short term liabilities (eBay Inc., 2021). Another important investment ratio is return on
equity, where the company has an increasing ROE, indicating eBay is reinvesting their earnings
effectively. Since most stocks retain earnings in business equity, this is important for
, shareholders and makes eBay a decent investment (Pysh, 2012, 9:40). Since the pandemic,
an increase in online shopping has increased net income and revenue, resulting in eBay
having impeccable financial statements for 2020. This does not guarantee that eBay is a
failsafe investment, but the company has the ability to be successful if they can maintain
financial stability. The pandemic shifted the way many people shop and it appears as though
many people would prefer to continue shopping online, despite some reducing their online
shopping habits as the country reopens (Cheng, 2020, para 14).
Stock Performance of the Last Year
Market Ratios for the company for the last 1-3 years and its major competitor for the last year
eBay Amazon
2018 2019 2020 2020
Price/Earnings Ratio - 16.34 15.09 4.76
Market/Book ratio 11.66 9.09 15.19 19.79
Earnings per share 2.58 2.1 7.98 42.60
(basic)
Earnings per share 2.55 2.09 7.89 41.77
(diluted)
Dividends per share - .56 .64 -
EPS assesses the financial health of eBay where having a minimal difference between the
diluted and basic EPS is a positive aspect to the financial statement because it shows there is
minimal dilution in the company’s shares. Although it is important to understand that even a
seemingly marginal difference of nine cents can still be a large sum of money if there are a lot of
outstanding shares. In 2019, eBay had only a one cent difference in the basic and diluted EPS,
where even as many as $100 thousand in outstanding shares would only equate to $1,000.00 of
unavailable value for investors. However in 2020 that same amount would be nine times more
(Morningstar, 2021). eBay had a significantly better EPS in 2020 even though the dilution was
FINC 330
Project 2
Bond Performance
Symbol Coupon Rate Maturity Date Callable Last Trade Last Trade Last Trade
Price Yield Date
2.60% 07/15/2022 Yes 102.15 .327% 04/30/2021
EBAY3879365
EBAY3879390 4.00% 07/15/2042 yes $107.73 3.473% 04/30/2021
The last prices of the two bonds were $102.15 and $107.73. Assuming the par value of
the bond is $1000, the investor will pay $1022.67 and $1078.11 for the bonds. Multiplying the
par value by the coupon rate shows the annual coupon interests payments would be $26 and $40.
Using a financial calculator, the current yields were determined as 25.45% for the one year bond
and 37.13% for the second bond that matures in 21 years..
The EBAY3879390 bond would be a better investment because it is callable and has the
ability to improve, but the investment can be rescinded if the bond seems to descend into a loss
and the investor is no longer comfortable with investing. Both bonds analyzed are callable, as
are most bonds that eBay offers. This would be beneficial for a company like eBay who does not
have a substantial history guaranteeing success or for a first time investor that is worried about
suffering major losses.
eBay’s current ratio, 1.80, indicates they are very liquid and would not have issues
paying short term liabilities (eBay Inc., 2021). Another important investment ratio is return on
equity, where the company has an increasing ROE, indicating eBay is reinvesting their earnings
effectively. Since most stocks retain earnings in business equity, this is important for
, shareholders and makes eBay a decent investment (Pysh, 2012, 9:40). Since the pandemic,
an increase in online shopping has increased net income and revenue, resulting in eBay
having impeccable financial statements for 2020. This does not guarantee that eBay is a
failsafe investment, but the company has the ability to be successful if they can maintain
financial stability. The pandemic shifted the way many people shop and it appears as though
many people would prefer to continue shopping online, despite some reducing their online
shopping habits as the country reopens (Cheng, 2020, para 14).
Stock Performance of the Last Year
Market Ratios for the company for the last 1-3 years and its major competitor for the last year
eBay Amazon
2018 2019 2020 2020
Price/Earnings Ratio - 16.34 15.09 4.76
Market/Book ratio 11.66 9.09 15.19 19.79
Earnings per share 2.58 2.1 7.98 42.60
(basic)
Earnings per share 2.55 2.09 7.89 41.77
(diluted)
Dividends per share - .56 .64 -
EPS assesses the financial health of eBay where having a minimal difference between the
diluted and basic EPS is a positive aspect to the financial statement because it shows there is
minimal dilution in the company’s shares. Although it is important to understand that even a
seemingly marginal difference of nine cents can still be a large sum of money if there are a lot of
outstanding shares. In 2019, eBay had only a one cent difference in the basic and diluted EPS,
where even as many as $100 thousand in outstanding shares would only equate to $1,000.00 of
unavailable value for investors. However in 2020 that same amount would be nine times more
(Morningstar, 2021). eBay had a significantly better EPS in 2020 even though the dilution was
