How does financing with corporate bonds

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Question

1. Is it a good time to issue? What factors favor issuing now and what factors do not?

2. What risks does WorIdCom face in issuing up to $6 billion in debt? How will investors and the market react to the large size of the offering? Would a series of smaller issues be a better strategy?

3. How does financing with corporate bonds typically differ from a bank loan? What are the major uncertainties that a firm faces when it issues securities?

4. Estimate the expected costs (percentage yields) that WorldCom will incur on the 3-, 5-, 7-, and 30-year notes. How would you attempt to explain to someone who is unfamiliar with credit markets why the bonds would be priced in this manner?

Reference no: EM133495667

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