Essentials of Corporate Finance and Gordon Growth Model

Task: Consider the table provided below for the task of essentials of corporate finance. Three bonds require to be chosen which bears the maturity from ten to twenty years to fill the provided tables. The bonds should be carrying the rating of “A to AAA,” “B to BBB” and “C to CCC” by referring to the bond screener link provided in this task. The mentioned bonds would bear the future value up to $ 1000. For evaluating the annual coupon payment, it should be required to utilize the debenture rate of bond counting the nominal value. If required to compute the original period for maturity, just deduce the expiry date from the present year. The value of yield to maturity and the present value quote regarding the bond would be available on the above-mentioned website. While processing this please note down that the value of the bond quote should be multiplied with 10 to arrive at the value in the present market. After taking these measures, you must clarify if any concession, premium or par is being applied on the specified bonds. Bond Company/ Rating Face Value (FV) Coupon Rate Annual Payment (PMT) Time-to Maturity (NPER) Yield-to-Maturity (RATE) Market Value (Quote) Discount, Premium, Par A-Rated $1,000 B-Rated $1,000 C-Rated $1,000 Provide a detailed account of the correlation of the detected values with those of yield to maturity and ratings. Give an account of why the method of trading the bond with discount, premium, and par is being affected by the debenture rate and income after maturity. As per the observations you have made in this phase of essentials of corporate finance, explain what is being anticipated to occur if the maturity would be yielded along with the market value of the respective bonds while keeping in mind whether the period of maturity would be changed by 5 years (Could be increased or decreased).

Subject Name: Finance

Level: Undergraduate

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