Golden Corp has been approached by a small investment bank interested in promoting a new financial security it has recently designed: theCEZ Bond. The bank has suggested that Golden Corp could raise $100 million by issuing the security on the following terms ...

IssuerNumber Issued Issue Price MaturityPar Value CouponGolden Corp1 million100% (of par value) 3 years$100nil Convertible The investor(s) may choose to swap each CEZ Bond for one Golden Corp ordinary share at maturity Exchangeable The issuer may choose to swap each CEZ Bond for one Golden Corp ordinary share at maturity

Golden Corp has been approached by a small investment bank interested in promoting a new nancial security it has recently designed: the CEZ Bond. The bank has suggested that Golden Corp could raise $100 million by issuing the security on the following terms ... Issuer Golden Corp Number Issued 1 million Issue Price 100% (of par value) Maturity 3 years Par Value $100 Coupon Convertible The investor(s) may choose to swap each CEZ Bond for one Golden Corp ordinary share at maturity Exchangeable The issuer may choose to swap each CEZ Bond for one Golden Corp ordinary share at maturity Golden Corp has an A+ credit rating and the current yield on Golden Corp's existing 3 year debt is 10% per annum. The current price of Golden Corp ordinary shares is $100 and the company is expected to continue with its current practice of paying an annual dividend of $5 per share for the foreseeable future. You have been asked by the nance director of Golden Corp for advice on whether the company should issue the security on the above terms. What should Golden Corp do '1