Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / IBM wishes to raise $1 billion and is trying to decide between a domestic dollar bond issue and a Eurobond issue

IBM wishes to raise $1 billion and is trying to decide between a domestic dollar bond issue and a Eurobond issue

Business

IBM wishes to raise $1 billion and is trying to decide between a domestic dollar bond issue and a Eurobond issue. The U.S. bond can be issued at a coupon of 6.75 percent, paid quarterly, with underwriting and other expenses totaling 0.95 percent of the issue size. The Eurobond would cost only 0.55 percent to issue but would bear a semi-annual coupon of 6.88 percent. Both issues would mature in ten years.

Assuming all else is equal, which is the least expensive issue for IBM?

And what other factors might IBM want to consider before deciding which bond to issue?

Option 1

Low Cost Option
Download this past answer in few clicks

2.89 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE