Is one approach fairer to all the investors in aggregate

Assignment Help Finance Basics

Reference no: EM13301324

You will invest (not investing is not a choice) in one of two bonds that are identical except for the details of their sinking funds. The sinking fund for Bond A calls for periodic redemption of bonds, with the bonds to be redeemed chosen by a random lottery. The sinking fund for Bond B requires that the company deposit with a very sound financial institution, which will act as the Trustee, funds that will be invested in US Treasuries that will mature at the same time as does Bond B. The total of the company's payments to the sinking fund and the interest earned on the Treasuries will be sufficient to redeem all of the bonds in the Bond B issue at maturity.

(A) From your perspective as an investor, what are the pros and cons of each approach if both bonds are rated BBB by S&P and Fitch and Baa2 by Moody's? Be sure to explain the reasons you classified things as pros and cons.

(B) Is one approach "fairer" to all the investors in aggregate? Discuss your reasons and logic that led you to your conclusions.

Reference no: EM13301324

Questions Cloud

Construct an argumentfor or againstthe notion : Construct an argumentfor or againstthe notion that an individual's privacyismore importantthan any otherconsideration like security,childcare etc. in the workplace,Use ethical theory to support your position. Using APA referencing system

Which of the following has the most severe consequences : For a public corporation, which of the following has the most severe consequences?

Explain the conversion of maleic acid to fumaric acid : Just completed the conversion of maleic acid to fumaric acid in the lab using Conc. hcl, heat and recrystallization. question: if the solubilities of the reactant and product were reversed( ie., if product were more soluble) how would one follow t..

Calculate the ratios and format the cells to insert a comma : Do a comparative analysis in a Word document not to exceed 200 words explaining whether the renovation should occur.

Is one approach fairer to all the investors in aggregate : From your perspective as an investor, what are the pros and cons of each approach if both bonds are rated BBB by S&P and Fitch and Baa2 by Moody's? Be sure to explain the reasons you classified things as pros and cons.

Explain the relative percentage of hcn and cyanide ion : What are the relative percentage of HCN and cyanide ion in a dilute aqueous solution at pH+9.2/ At pH=10.2

What is the relationship of right being to right doing : Think about his meaning and how it might be similar or different than key ideas in seeking the highest good in both Confucianism and Christianity. 2. What is the relationship of right being to right doing in each of these three religions (Taoism, Co..

Researching my career : Researching My Career.

Find current flows in the second wire : A vertical straight wire carrying an upward 11 A current exerts an attractive force per unit length of 8.8 multiplied by 10-4 N/m on a second parallel wire 8.0 cm away

User Account

All Pages