Please refer to the below images including RJR Nabisco Holdings Capital Corp.--1991 Case study.

I need the answer to the following:

1. What package of Discount Debentures and Treasury STRIPs would produce one "synthetic" 13.5% Debenture? On January 15, 1991, how much would it cost Ms. Samuels to buy the components of one synthetic 13.5% bond using Discount Debentures plus Treasury STRIPs?
2. How will the synthetic 13.5% and the RJR 13.5% Debentures perform differently over time? You may want to consider factors including, but not limited to, how the two investments are affected by interest rate change, changes in RJR's credit rating, etc.
3. How could Ms. Samuels profit from the relative mispricing of the RJR 13.5% Debenture and the Discount Debentures? What advice might she give to the following of her clients, each of whom does not pay any taxes?

Client A already owns the 13.5% RJR Debenture.

Client B does not own the 13.5% RJR Debenture.

Of what risks should Ms. Samuels advise her clients, if they follow her advice? Would you expect the relative prices to remain as they are on January 15, 1991? Why or why not? What might explain the relative pricing in January 1991 of the Discount Debentures and the 13.5% Debentures?

1. Why do you think RJR Nabisco chose, at issue, to structure its debt using these terms? In November 19914, what would you expect the prices of the three debentures will be, relative to one another?