Question: PROBLEM 210 According to an article in TheWall Street Journal, a European filmmaking studio, Polygram, is considering funding movie production by selling securities. These securities

PROBLEM 2–10 According to an article in TheWall Street Journal, a European filmmaking studio, Polygram, is considering funding movie production by selling securities.

These securities will yield returns to investors based on the actual cash flows of the movies that are financed from the sale of these securities.

Required:

a. What information would you suggest the filmmakers provide to investors to encourage them to invest in the production of a particular movie or movies (i.e., what information is relevant to your decision to invest in a movie)?

b. What kind of evidence can be included to support claims in the prospectus (i.e., what can maximize the reliability of the information released)?

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