A) $10,000 ten-year bond was issued at an interest rate of 6%. It is now year 9 and you are thinking about buying the bond from its owner. Interest rates are now 9%. (Taylor & Greenlaw, 2014, p. 403).
Would you now expect to pay more or less than $10,000 for the bond? Why?
i. Calculate what you would be willing to pay for the bond.
b) Consider the following stock ownership situation (Taylor & Greenlaw, 2014, p. 403).
- Investor 1: 20,000 shares
- Investor 2: 18,000 shares
- Investor 3: 15,000 shares
- Investor 4: 10,000 shares
- Investor 5: 7,000 shares
- Investors 6 - 11: 5,000 shares each
i. What is the minimum number of investors it would take to vote to change the top management of the company?
ii. Which investors would this involve?
iii. In 1-2 paragraphs discuss if any one investor would be able to make corporate changes without the agreement of the other investors.