1. If you are an investor who is looking for a bond to invest in, which bond...
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Question:
1. If you are an investor who is looking for a bond to invest in, which bond would you choose to invest? Why? Take a look at the balance sheet and income statement of the company. What data or ratios support your decision to buy this bond or not?
2. Being the bond callable, does it change your decision to buy them?
KO.GO Bond: 101.060% * 1000 = $1010.60
KO.GU Bond: 102.533% * 1000 = $1025.33
The Annual Coupon Interest Payment:
KO.GO Bond:
Coupon rate: 3.15/100 = .0315
.0315 * 1000 = $31.50
KO.GU Bond:
Coupon rate: 3.30/100 = .0330
.0330 * 1000 = $33.00
The Current Yield of the Bonds:
KO.GO Bond: (1000*0.0315)/(101.060*10) = 0.031169
0.031169 * 100 = 3.12%
KO.GU Bond: (1000*0.0330)/(102.533*10) = 0.032184
0.032184 * 100 = 3.22%
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