Question
The Boeing Company (BA) I want help with this question Boeing has suffered two crashes of its 737 Max8 aircraft in the last 5 months,
The Boeing Company (BA)
I want help with this question
Boeing has suffered two crashes of its 737 Max8 aircraft in the last 5 months, the most recent on March 10.This new model is expected to be a very significant part of its commercial aircraft business in the future, with an order book of about 5,000 planes. The 737 is Boeing's most important plane, generating 30% of the company's revenues and 35% of its profits according to Bloomberg Intelligence.[First sold in 1967, its 10,000thplane was delivered in 2018.]Naturally, markets have responded.
In this assignment, you are to take a look at the market prices of the company's stock and its bonds.Describe what has happened, what the markets are telling us about this time in the company's experience and where you believe the company is headed based on market reaction and sentiment.In evaluating the bonds, three bonds of the company as follows: the 2.35% bond maturing 10/30/21; the 6.125% bond maturing 2/15/33 and the 7.5% bond maturing 8/15/42.One of the measures you must look at is the spread above Treasuries on these bonds and whether they have changed significantly.Look at the stock price and prices and YTM of the 3 bonds and Treasuries of comparable maturity a month before the incident, a week before the incident and then March 15, 22, 29 and April 5.Calculate the spread of each bond on these dates.A material increase would indicate that the company's default risk has increased.
This is a story playing out before us and there will probably be breaking news in the weeks to follow, which may have an effect on the securities of the company. Use available sources to put your thoughts together.You may use thewww.finra.org/marketdatasite for information on corporate bonds.For information of US Treasuries you may use this link.http://www.wsj.com/mdc/public/page/2_3020-treasury.html.
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