Murphys Brewhouse was a rapidly expanding chain of home-brew bars. The beer was not very good, but

Question:

Murphy’s Brewhouse was a rapidly expanding chain of home-brew bars. The beer was not very good, but hopes were high when the company went public three years ago, because of founder/owner Kevin Murphy’s promotional skills.
At the time the company went public, Murphy’s also issued $50 million of 20-year at a rate of 9 percent. These were sold at par ($1,000 per bond). Shortly after this debenture issue, Murphy’s received some very negative reviews, both in the gourmet beer magazines and on Wall Street. The company is currently struggling. Its stock has plummeted from $40 per share three years ago to less than $5. Earnings remain positive but disappointing at $0.03 per share, and the company is barely breaking even on a cash flow basis.
Murphy’s are currently selling at 40 cents on the dollar. The are callable two years from now at $1,090. If you require a 20 percent rate of return on investments of this perceived risk level, should you buy these ?

Debentures
Debenture DefinitionDebentures are corporate loan instruments secured against the promise by the issuer to pay interest and principal. The holder of the debenture is promised to be paid a periodic interest and principal at the term. Companies who... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...