Vanilla Stocks and Bonds

Mr. Shields’ should accept Mr. Fordham’s proposal in relation to the acquisition of Upstate Canning Company, Inc. In this case, Mr. Shields attempts to conclude if he should acquire the company from its owner, Mr. Fordham, using his personal savings of $35,000 in addition to an investment of $65,000 from his associates. Moreover, Mr. Fordham proposes that he will loan Mr. Shields’ $300,000 worth of income bonds, to be repaid in up to 10 years. Mr. Fordham provides Mr. Shields’ with a bond repayment schedule which allows Mr. Shields’ to repay the bonds at a discount if he meets the wishes to repay the bonds back early. Mr. Shields’ faces a

Three interrogations were thus to answer. Should the company provide investors with classic bonds or give them the opportunity to convert them into equity? Should they structure the offer with a fixed or a floating coupon rate? And last but not least, where should they locate the operation?

Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 - Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due

Knowing this information, you need to first tell me, and then show this in your graph:

Apple is a large multinational company and is the second largest information technology company. Apple has a revenue of $199.9 billion and a profit of $44.46 billion. Apple’s market capital, meaning the aggregate value of the company based on its current share price and the number of outstanding stocks is $741.8 billion. Apple is a public company meaning you can buy shares into the company, which are traded freely on a stock exchange and is now the largest publically listed company. It was founded by Steve Jobs, Steve Wozniak and Ronald Wayne on April 1,1976. Apple employs 92,600 people and has 437 stores located in fifteen different countries. An online store is also available in 39 countries to serve on

At the end of 2008, AT&T owed 168.9 billion dollars which included current liability, long term, and total deferred credit and other noncurrent liability. Their short term debt that was maturing within the next year totaled 14.1 billion dollars and long term debt equaled 60.9 billion dollars.

The aim of this report is to recommend whether or not a publicly traded company has been is worth investing in. The company chosen in this case is JPMorgan & Chase which is a large financial institution. This report is going to use a financial rational formed by the analysis of various financial metrics.

Considering UST only had short-term debt issues prior to the recapitalization, and that credit ratings depend on maturity of debt issued, we cannot simply rely on the commercial paper ratings to extrapolate. We assume that rating will be A based on competitors’ ratings as well as UST’s overall financial standing. We then use this assumption to calculate the value of the company using the two methods above.

The market value of debt was calculated using the existing yield of maturity on a 5 yar bond issued on a private placement basis on July 1, 2000. With the coupon of 5.75% and the discount price of 97, YTM for this bond is 6.62%. With a discount price being 97, the market value of debt is 17,654M.

WorldCom has the option to extend its bank loan credit facility or to issue this large $6 billion in debt. It plans to use the rolling commercial paper program to pay British Telecommunications for MCI’s share purchases, and then use bond proceeds to pay off the commercial paper program. This signals that WorldCom does not need the money immediately for a single corporate purpose, and does not need the money immediately. Therefore, perhaps it makes sense for WorldCom to issue the bonds in smaller installments rather than flooding the market with $6 billion in debt all at once. The first reason for this is that, if an underwriter must first purchase the bonds before selling to investors, an underwriter may demand greater spread in order to justify taking down an entire $6 billion in debt using the bank’s capital assets. The second

If the company benefits from the provision of the bond, then the coupon rate will be higher. If the bondholder’s benefit, then the bond will have lower coupon rate.

Introduction. This paper discusses the value of a one-year Cardinal Health bond. The approximate value of such a bond is determined, reflecting knowledge of time value of money, and the bond's value is discussed in relation to the operating statistics of the company. There is also discussion of competitor's similar bonds and the relative value of those compared with the Cardinal bond.

Besides the lowest coupon rate in Switzerland, we further calculate the bond repayment in determining which currency Carrefour better choose to issue its 10-year bond. Given all the data in which we will use it as out inputs in this case, using Excel to calculate the bond repayment and total interest rate over 10 years period.

The market risk premium of 5.5% and the risk free rate of 4.62% (30-year U.S. Treasury) were given in the case. The beta and the pre-tax cost of debt are based on our averaged comparative company analysis. Using the averaged beta of 1.05, the pretax cost of debt of 5.79%, (based on bond ratings) and the weighted average of debt & equity, the telecommunications segmented hurdle rate is calculated at 8.64% (see Exhibit 2).

Apple’s annual report, as submitted to the United States Securities and Exchange Commission (SEC) on Form 10-K, lists its total assets as $47,501 for fiscal year 2009 and $75,183 for fiscal year 2010. Its largest asset for the same two years was $18,201 in short-term marketable securities in 2009 and $25,391 in long-term marketable securities in 2010. Accounts payable listed as $5,601 in 2009 and $12,015 in 2010. All figures are noted in millions (Apple, Inc. Annual Report). Apple does not report taxes collected from its customers that are paid to governmental authorities. Apple’s 2010 annual report lists cash, cash equivalents, and marketable securities valued in 2010 as $51,011 million and in 2009 as $33,992 million. Total current assets in the year of 2010 were $41,678 million and for the year ending 2009 were $31,555 million. Current assets are listed in the order