Question
WuTan Ltd. provides waste management solutions to clients. The capital structure of WuTan Ltd is corporate bonds (70%) and equity (30%). The firm is considering
WuTan Ltd. provides waste management solutions to clients. The capital structure of WuTan Ltd is corporate bonds (70%) and equity (30%). The firm is considering undertaking the following activities. If you are a bondholder would you object to any of the following? Explain your answer for each of the following activities in detail by referring to the material covered in the unit.
- Planning to issue new corporate bonds to fund new investments related to liquid waste management. - Planning to distribute part of its profit to shareholders. - Planning to invest in a product that has a very low success rate.
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