A. What effect would you expect each of the calculations you performed to have in terms of

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Question:

A. What effect would you expect each of the calculations you performed to have in terms of the company’s decision to raise capital in this manner? In other words, for each situation, would you consider bond valuation to be a viable option for increasing capital? Be sure to justify your reasoning.

B. To what extent do you feel the company’s bond issuance policies support or hinder their strategies? For example, if the company is attempting to fund operating expenses, refinance old debt, or change its capital structure, are they issuing sufficient bonds to achieve these goals? Be sure to substantiate your claims.

PART II: BOND ISSUANCE
	Curent Bonds from Financial Statements

	Present Value	PV	($2,963)
	Periods	N	40	Semi-annual payment: 2036-2016 = 20 years *2 = 40 periods
	Interest	I	2.9375	Interest paid semi-annually: 5.875%/2 = 2.9375%
	Payments	PMT	0	This bond does not make regular PMT except for interest
	Future Value	FV	$2,963.01	CALCULATING FV (please see help on the right hand side)

1. The new value of the bond if overall rates in the market increased by 5%							680.58
						7407.5
	Present Value	PV	($2,963)
	Periods	N	40
	Interest	I	5.4375	Please adjust interest		5.875%+5% = 10.875%/2 = 5.4375%
	Payments	PMT	0
	Future Value	FV	$12,926.71	CALCULATING FV (please see help on the right hand side)


2. The new value of the bond if overall rates in the market decreased by 5%

	Present Value	PV	($2,963)		0.004375	2488.260739
	Periods	N	40
	Interest	I	0.4375	Please adjust interest		5.875%-5% = 0.875%/2 = 0.4375%
	Payments	PMT	0
	Future Value	FV	($267.37)	CALCULATING FV (please see help on the right hand side)