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Financial Option 3 : $ 3 0 Million Investment in Bonds Rationale for investment: The business is offering these bonds for sale contracts with another

Financial Option 3: $30 Million Investment in Bonds
Rationale for investment: The business is offering these bonds for sale contracts with another business
in China to assemble computer parts. The Chinese business has used child labor in the past, but it claims
it has stopped this practice. However, the U.S. business selling these bonds has not investigated to verify
whether these claims are true.
2
Assumptions to consider:
10-year bond
8% coupon
Priced at a discount: $95
Discount rate is 9%

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