Wednesday 22 January 2014

Time Value of Money and Bond Valuation

Discussion 1: Time Value of Money (see attached to help with this discussion 1)

A. Examine the concept of time value of money in relation to corporate managers. What are two (2) specific examples that demonstrate how the time value of money can help corporate managers to make good financial decisions?
 
B. Please respond to the following: Starting with your current situation, what must you do to ensure an annual retirement income of $60,000 starting at age 65?  Make sure that you submit calculations that support the conclusions (you may use the Excel retirement calculators that are provided, online retirement calculators, or develop you own Excel solution).

Discussion 2: Bond, Bond Valuation, and Interest Rates
A. What are the pros and cons of a sinking fund from the viewpoints of both a firm and its bondholders?  If you were the CFO a firm, would you recommend a sinking fund for a new bond issue?  Why or why not?

B. * From the scenario and e-Activity, recommend two (2) bonds that you believe TFC should invest in, and provide a rationale for your recommendation

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