Question: Assume now that Office Helpers in problem decides to go public and that it would like to have its shares trade at a target price of $ 10 per share. If the initial public offering is likely to be under priced by 20%, how many shares should the firm have?
Problem: A commodity bond links interest and principal payments to the price of a commodity. Differentiate a commodity bond from a straight bond, and then from equity. How would you factor these differences into your analysis of the debt ratio of a company that has issued exclusively commodity bonds?