Question: When you present your thoughts to Sue she thinks about your input and decides to invite in an investment banker to give her additional guidance.

When you present your thoughts to Sue she thinks about your input and decides to invite in an investment banker to give her additional guidance.

She invites you to the meeting and the investment banker presents several options.

The first option is to issue bonds and the second option is to call in your outstanding bonds and obtain a loan from a bank instead.

Scenario Steps to Completion

Task 3--. Option one is for Stirm to issue debt in the form of bonds to fund recessionary periods resulting in order and thus revenue shortfalls. If the company issues new bonds bearing a 6% coupon, payable semiannually and the bond matures in 8 years and has a $100,000 face value. Currently, the bond sells at par.

Please compute the bond prices considering that there will be no change in the interest rates for the life of the bond.

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