. KROGER CO KR.GI Corporate Bond 7.700 06/01/2029 Baa1 BBB 121.736 4.117

2.

• Coupon rate - 7.7%
• Annual coupon payment - $77
• Payment is semi-annual which means it pays twice a year.
• Maturity is 06/01/2029
• Rating is BBB. This means that it can reach financial commitments but it may be affected by the economic conditions.
• The last quoted price was 121.74.
• $45.42
• 77/121.74 = 63.25%
• YTM is the total return that is expected when a bond is held to maturity.
• The bond is callable. That means it can be redeemed before its maturity date. It would not change my decision to buy the bond since it would give the option of redeeming the bond early.

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Question

Would you prefer to buy the bond issued by the company chosen ? You should develop a specific recommendation, with supporting rationale to explain your answer.