you should answer the main question: If you are an investor who is looking for a bond to invest to, are you going to buy a bond that you chose? To answer this question you should complete three steps: 1). Copy the bonds quotation from the website. 2). Describe the main elements of the bond: To find the information on bonds, click on Search in the middle of the screen, under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS. Another useful website on bond information is . To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH. 3) Take a look at the balance sheet and income statement of the company. What or r support your decision to buy this bond or not? You should to explain your answer. you should answer the question: Would you prefer to buy the bond issued by the company chosen by another student? You should to explain your answer. Post by Sabrina 1)Copy the bonds quotation from the website. Welcome to the Bond Section of the Market Data Center. This section includes general bond market information such as news, benchmark yields, and corporate bond market activity and performance information, descriptive data on U.S. Treasury, Agency, Corporate and Municipal Bonds, Credit Rating Information from major rating agencies, and price information with real-time transaction prices for Corporate and Agency Bonds (TRACE), Municipal Bonds (MSRB) and end of day prices for U.S. Treasury Bonds. 2) Name: 1011778 B C UNLIMITED LIABILITY CO / NEW Retrieved from londonessays.com Coupon rate: 4.625% Annual coupon payment: $1000(4.625%) = $46.25 1000+46.25= $1046.25 Frequency of coupon payments: 1 Maturity: 7 years, as the offering date was 2015 and maturity is 2022 Rating: Ratings provide an option regarding if a bond is a good or bad investment, sharing insight of risk. The rating here was withdrawn in 2019 with a high yield The last price listed in the quotation: $100 How much the investor would pay: $1100 Current yield: 4.625%(1000)= 46.25% YTM listed: Not listed. YTM shares the speculative rate of return or interest rate of a bond. The equation and variables necessary to find YTM are shown below: Image 1 (CFI Education Inc, 2020). Where: C Interest/coupon payment FV Face value of the security PV Present value/price of the security t How many years it takes the security to reach maturity (CFI Education Inc, 2020). Callable or not: this bond can be paid off before the maturity rate, meaning that its callable. Depending on the size of the investment, this may deter someone from investing, as the issuer may redeem the bond before the maturity date (SEC, n.d.). 3) What or r support your decision to buy this bond or not? I would not buy this bond, as the investment does not yield a high coupon rate, as it is under 5%. This may be reasonable if I was investing a lot of money, but I would not be investing a lot of money and could invest better elsewhere. Also, the current coupon rate is of the higher rates that the coupon rate has been, meaning that it is not likely I would have any increase on a return during the lifetime of the investment. Reflection This discussion confused me quite a bit. I spent some time trying to do it myself, and believe that I didnt do it the right way. A big part of this was
that I had trouble finding bond names, so I decided to use the name found by one of our peers in order to pull up a better bond to work with. Honestly, Im not sure if the first one that I used was even a bond; these finance websites mess with my head a little bit I wonder if that has anything to do with my dyslexia, haha. After finding a bond to work with, the rest was pretty straightforward, though Im curious if the YTM may be provided somewhere else on the Internet, as I could not find it in my own research. References CFI Education Inc. (2020, January 24). Yield to maturity (ytm) overview, formula, and importance. Retrieved April 09, 2021, from londonessays.com SEC. (n.d.). Callable or redeemable bonds. Retrieved April 09, 2021, from londonessays.com Post by Dillion 1). + ADD TO WATCHLIST 9.950 % 02/15/2032 F.GI 345370BH2 $138.50 5.260% 03/22/2021 2. · Coupon Rate is 9.950% · Annually Coupon Payment = 9.950 * 1,000 = $99.5. · The Payment frequency is Semi Annually. 99.5/2 = $49.75 is how much the payment is going to be. · The maturity date is 02/15/2032. Moodys® Rating Ba2 (03/25/2020) Standard & Poors Rating BB+ (03/25/2020 The meaning of the rating is to indicate their credit quality. Bonds with the ratings of BBB for (Standard & Poors) or Baa3 (on Moodys) and better are considered investment grade while those with lower ratings are considered speculative (high yield). · $138.50 · $138.50*1,000/100 = $1,385 · Yield = 9.04% 9.04%*1000 = $90.4 90.4/138.50 =0.65270 0.65270* 100 = 65.27% · 90.4/2= 45.2 · PV= $138.50 FV= $1,000 YTM = 0.65270 * 2= 1.3054 1.3054 * 100= 130.54 YTM is yield is column is 9.950 for F.GI and 8.875 for F.GJ. YTM stands for Yield to maturity and is very important to the company. YTM is the annual rate of return that an investor can expect to earn if they hold a bond till maturity. · No, the bond is not callable. A callable bond is a bond that can be paid off by the company issuing the bond be it matures. Me personally, it is less attractive because it will be short lived but to others it could be attractive because of its rate of return. 3. Debt to assets ratio is 236,450/267,261(total liabilities/total assets) which equals 88.47%. This shows that the company has a high financial leverage, which has a high financial risk. Its totals assets compared to its liabilities is low which could potentially reduce the risk for the company. Fords operating income is -4.408 and interest expense is 1,649. The time interest earned equals -4.408/1649 = -00.26. The ratio shows that the company has a really low time interest earned. The operating income does not cover the interest expense in which makes it a high risk for debtholders. My recommendation is not to buy this bond. Ford has shown a really sharp decline since 2001. Ford is such a high risk for those who decides to invest and looks like they eventually might go out of business in the future. They have showed to be on a steep decline in its asset to liabilities ratio and they are only digging themselves into a bigger hole. This was a great learning experience in which I learned a lot. Bond detail. (n.d.). Retrieved April 10, 2021, from FORD motor co.dl-debts. 1992(32) bond | markets Insider. (n.d.). Retrieved April 10, 2021, from londonessays.com Purchase the answer to view it Purchase the answer to view it