Question
1. You are considering investing in the bonds issued by ABC Corporation. They have a coupon rate of 6% and a maturity date of March
1. You are considering investing in the bonds issued by ABC Corporation. They have a coupon rate of 6% and a maturity date of March 21, 2046. ABC Corp is an industrial firm and these bonds are not rated by Moodys or S&P. The stock sells for $40 per share and pays a dividend of $ 0.15 per year. (in you answer be certain to EXPLAIN why you chose each ratio)a. As a bond investor what six ratios would you use to determine the risk level for your potential investment? b. If you were considering a one year investment by purchasing the stock of ABC instead of a bond, what three ratios would you consider most important in your decision.
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