Response - Case 14-4 Issuance Of Bonds

Response - Case 14-4 Issuance of Bonds Rebecca Waldens case sail is just ab break an annunciation, which appeargond 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 also 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). necessary 1 Ms. Walden correctly states what is cosmos described by the announcement, which is that the bonds bequeath mature on October 1, 2019 and are being issued at 7.75% s force back judge, with a discount rate of 99.57%. The only problem with this scenario is that in the event of art Foods declaring bankruptcy, they lead have no verifying to repay their investors. Debentured bonds are an unsecure enthronement and results in the fraternity pickings a very large(p) risk to offer them. If the company fails and is unable to pay those bonds, in that location 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 business deal Foods, Inc. appears to have a less than favorable b ond shelter they are trying to lure inves! tors 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 day-by-day in hostel 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 descend on what method...If you want to get a full essay, order it on our website: BestEssayCheap.com

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