Income from stock purchased above par: Find the annual income by investing $81,000 in 9% stock quoted at 135 (i.e., $135 per $100 nominal). Assume coupon is on nominal value.

Introduction / Context:
When purchasing fixed-interest stock at a premium or discount, annual coupon income depends on the nominal (par) amount acquired, not on the cash investment directly. The quotation tells you how much nominal you buy for your investment.

Given Data / Assumptions:

• Coupon rate = 9% per annum.
• Quoted price = 135 per $100 nominal.
• Cash invested = $81,000.

Concept / Approach:
Nominal purchased = Investment / (Quoted price per $100) * 100. Annual income = coupon rate * nominal purchased.

Step-by-Step Solution:

Verification / Alternative check:
Buying at 135 means paying $1.35 for each $1 of nominal; $81,000 / 1.35 = $60,000 nominal. 0.09 * 60,000 = 5,400 is consistent.

Why Other Options Are Wrong:
$6,000 would be 10% of $60,000; $5,500 and $5,000 are off; $6,400 does not correspond to 9%.

Common Pitfalls:
Taking 9% of the cash invested instead of the nominal; mis-scaling when converting from quote per $100.

Final Answer:
$ 5400