Problems based on tombstones

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Reference no: EM13765372

It is a case study, please answer all those questions and make it as a report doc. Around 5 pages. The requirements and questions are in the word doc, the pdf file is the case tombstones.

Case: Tombstones (HBS 5-213-085)

Assignment:

1. MSFT Notes:
a. Why is MSFT raising money?
b. Is this paper really cheap? What is YTM for each issue?
c. Why YTM differs from coupon rate? What should we compare YTM with?
d. Why did MSFT issue four papers instead of one?
e. Do you expect that those notes will be called or redeemed?
2. Coca Cola Enterprise Notes:
a. What is YTM for CCE issue?
b. What are the differences w.r.t. MSFT note above?
c. What is default risk for CCE note?
d. Why is CCE raising funds?
3. Norfolk Southern Century Bond:
a. Why did NSC "reopen" this issue to raise another $250M?
b. Do you think NSC is going to be around in 2105? Does this matter?
c. Who buys those century bonds?
d. Why don't we see more of these?
e. Under what conditions do you expect NSC to redeem those bonds?

4. IBM Floating Rate Note:

a. What is different about this issue?
b. What is the rate? What should we compare it with?
c. Why IBM is raising funds?
5. Cephalon Convertible notes:
a. How do these work?
b. How can small no-name company issue debt at 2.5% when Coca Cola has to pay 4.25%?
c. How do you participate in upside?

Reference no: EM13765372

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