Response - Case 14-4 Issuance Of Bonds

Response - Case 14-4 Issuance of Bonds Rebecca Waldens case canvas tent is just ab come forward an annunciation, which appe ared in the Financial World Journal, on October 15, 2009. This announcement stated the intention of workmanship Foods, Inc. to issue $750,000,000 of debentured bonds. It in any case states that copies of the course catalog and the related prospectus supplement may be obtained from Keegan Morgan & Co. Inc., Coldwell Bros. & Co., Robert stack & Co., and from Sherwin-William & Co. (Spiceland, Sepe, Nelson, and Tomassini, 2009, p. 941). urgency 1 Ms. Walden correctly states what is being described by the announcement, which is that the bonds bequeath mature on October 1, 2019 and are being issued at 7.75% s concur calculate, with a discount rate of 99.57%. The only problem with this scenario is that in the event of blind Foods declaring bankruptcy, they pass on have no verifying to repay their investors. Debentured bonds are an unsecure ent hronement and results in the fraternity pickings a very hulking risk to offer them. If the company fails and is unable to pay those bonds, on that point could be large jural repercussions as well as various government accounting system agencies taking a closer look at the practices of release debentured bonds in the future. Requirement 2 Next Ms. Walden writes in more flesh out about the psychological reason behind the securities being priced as they were. She feels that the main motivation for this company is risk. The risk justifies the means and since forge Foods, Inc. appears to have a less than favorable bond assess they are trying to lure investors by the risk of a discounted rate of 99.57%. Will this risk work? Often it does. in that respect are many investors will in to take the thread hold on less than solid companies everyday in dress to make more money. Requirement 3 Finally Ms. Walden talks about two accounting loves for Craft Foods, Inc. and how they recorded the sale. The first! consideration she states is that the company must find out on what method...If you want to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay