Bonds and valuation

FratBro23
Category:
Business & Finance
Price: $35 USD

Question description

Write a paper describing the below on a fictitious company of your choice. 

I have attached an example of what the final paper should look like. Finance Project.docx 

The final paper should include the below: 

Brief background information for both your shadow firm and fictitious firm, and why and how you picked them.

·  Problem statement, methods and approaches, experimental results, discussion of the results. Make sure to answer all the questions in the TO DO list in the syllabus.

·  Conclusions. What did you learn and what are the implications of what you learned from the project.

All reports should be submitted in Times New Roman-12" font, single-spaced with 1-inch margins. 

a.  Name your firm, describe the business it is in.

b.  Choose a publicly traded corporation to act as a shadow firm. (1) Go to http://www.annualreports.com, and look up the most recent annual financial statements for your shadow firm.

To Do (Bond Valuation Project):

1.  Retrieve current information on the most recent debt issuance by your shadow firm. Several sites are available, including Standard & Poor’s home page. Although you can use this site free of charge, you are required to register. Alternatively, you can find bond quote for your shadow firm at www.morningstar.com.

2.  Using the current rating on your shadow company’s most recent debt and a current quote on comparable Treasuries, estimate the risk premium inherent in the difference between the rates on the most recently issued debt and the risk-free Treasury.

3.  Let’s use the YTM on your shadow firm to determine the coupon rate offered by your fictitious firm.

4.  Beyond determining the coupon rate, your group must decide on an appropriate use for the funds. In other words, you must design an investment project that makes sense in the context of your fictitious firm. What is the purpose of the investment? What are the returns expected from the investment? Essentially, you should design and defend this investment.

5.  Show how this bond’s valuation will change given differing assumptions on required return. In other words, what is likely to happen to the bond’s valuation if market rates rise (or fall) following the issuance of this debt?


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UC Berkeley
PREMIUM TUTOR
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1819 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors