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Consider the following pair of bonds which are alike except for the characteristics listed. Bond A Bond B Coupon rate 4% 0% Bond rating AAA

Consider the following pair of bonds which are alike except for the characteristics listed. Bond A Bond B Coupon rate 4% 0% Bond rating AAA BBB Convertible Yes No Discuss which bond should have the higher yield to maturity. (b) Company A is a fast food restaurant selling Ramen. Company B is a manufacturer of beauty products. The operating characteristics of a company is shown below: Cash cycle = -10 days Suppliers sell their goods to the company on a net 30 days basis Appraise which of the companies, A or B, comes closest to the operating characteristics described above.

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