Question 3 ((2+2+2+2) = 8 marks)

Cleanaway Inc. provides services for sustainable waste management solutions. The capital of Cleanaway Inc. are corporate bonds (60%) and equity (40%). The firm would like to consider undertaking the following activities. If you are a bondholder, would you object to any of these activities? Explain your answer for each of the following activities in detail by making reference to the material discussed in the unit.

Planning to issue new corporate bonds to fund production of blue box that would provide solution for electronic waste management.

Planning to distribute part of its profit to shareholders

Planning to invest in production of hospital grade solvent that has a very low success rate

Not investing in projects related to managing liquid waste because the value addition to the business from these projects are very low.