Financial Option 3: $30 Million Investment in Bonds Rationale for investment: The business is offering...
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Accounting
Financial Option 3: $30 Million Investment in Bonds
Rationale for investment: The business is offering these bonds for sale contracts with another business in China to assemble computer parts. The Chinese business has used child labor in the past, but it claims it has stopped this practice. However, the U.S. business selling these bonds has not investigated to verify whether these claims are true.
Assumptions to consider:
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10-year bond
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8% coupon
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Priced at a discount: $95
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Discount rate is 9%
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