Assingnment draft for corporate finance

Key Assignment Draft

Incorporate the answers into a draft using the outline below. You can rearrange if you’ d like.

Find 2 companies with debt and that pay dividends. You can use the following to find a company

http://www.google.com/finance/stockscreener

. To find the company’s information go to. http://

www.sec.gov/edgar.shtml

. Add the criteria of long term debt. Look at the long term debt to assets to secure the company has debt. Determine the coupon price, the length of maturity, and yield to maturity. Calculate today’s price of the bond.

List the pertinent info on the bond you chose then calculate todays price of the bond

Which bond is receiving a higher price?

From a time value of money concept what does each rate say about the viewpoint on the time value of money?

Which company has a better credit rating. Explain.
Based on credit rating, which company do u believe the bank feels more secure about paying back a loan?

Why does the bank charge more interest for one company than the other?

What does the credit rating say to an investor?

I. Introduction- Two companies chosen that encounter debt

II. Company 1

A. debt accumulated

B. dividends

C. long term payout

III. Company 2

A. debt accumulated/ coupon price

B. dividends

C. long term payout and todays price of the bond

IV. Pertinent Info pertaining to vanilla bonds

1. Price calculated from each company

2. Which bond receives higher price

3. Credit ratings

A. AAA rating

B. BBB rating

C. Junk rating

V. Investor alternatives to incorporate bonds

1. Annuities/Perpetuities

2. Types of bonds to choose

Conclusion