WORLDCOM‚ INC: CORPORATE BOND ISSUANCE Introduction This case raises many interesting questions concerning the record setting issuance of corporate debt by WorldCom‚ Inc. (“WorldCom”). Both the surprisingly voluminous structure of the proposed issuance and the foreboding macro-economic climate in which it was slated spark concerns over the risk and cost of the move. One of the first questions that must be addressed is whether WorldCom’s timing was appropriate. Next‚ the company’s choice of
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WORLDCOM‚ INC: CORPORATE BOND ISSUANCE 1. IS IT A GOOD TIME FOR WORLDCOM‚ INC. TO ISSUE? CONSIDER FACTORS IN FAVOR AND FACTORS THAT ARE NOT IN FAVOR. Personally I believe that the time is not in favor of WorldCom in undertaking one of the largest bond issues at the time. Even though there are many advantages with proceeding with the issue‚ I believe that the degree and the uncertainty raised by some of the disadvantages outweigh the advantages of going ahead with the $6Billion
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Tutorial 2 Q1. Why do most international bonds have high Moody’s or Standard & Poor’s credit ratings? Credit Rating is a social intermediary service to provide credit information and reference for the community. Credit rating is aim to show the size of a credit default risk the rating object‚ rating agencies focus on financial conditions and historical data to give the overall valuation of object. Currently‚ credit rating on the issue of international bonds is the popular investment risk valuation
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Mission Statement and brief background about WorldCom. Briefly explain how WorldCom did not honor their statement. WorldCom - "our objective is to be the most profitable ‚ single source provider of communications services to customers around the world. Unstated Mission - Increase shareholder value." WorldCom’s mission statement neatly encapsulated aspirations and strategies to be the leading facilities-based provider of end-to-end Telecommunications and Internet services to business customers
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The role of Eurodollar bond issuance in Emerging Markets Eurodollar bonds are U.S. dollars held in banks outside the United States by a non US organization. They pay interest and principal in Eurodollars. These bonds are not registered with the Securities and Exchange Commission. Due to fewer regulatory restrictions and costs in the Euromarkets‚ Eurodollar bonds can be sold at lower than U.S. interest rates. Eurodollar bonds are one of the more common Eurocurrency bonds because of the international
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securities fraud‚ however they defended themselves to say that they were forced to cover things up by other top officials. As reading through the questions given in class it was hard to completely gather all thoughts into one area. We know that World Com is a for profit organization that provided telecommunications to
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September 6‚ 2014 Shannon Troutman Discussion 2.1: American Greed: Inside the WorldCom Scam Title: Pointing the Finger Question: The corporate scandal involving WorldCom regrettably illustrates improper cost transfers designed to achieve higher profit levels. WorldCom did not transfer the cost from leases from the balance sheet to the income statement as quickly as they should have. This had the effect of overstating assets on the balance sheet and net income on the income statement. Please watch
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board of directors differ from one country to another. In the US companies must comply with the laws in which the company was incorporated. Many countries agree on what the most important responsibilities of the board of directors are. Setting corporate strategy‚ overall direction‚ mission or vision is among the most important. The board of directors is also responsible for controlling‚ monitoring or supervising top management. This includes hiring and firing of the CEO and top management. They
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Finance journal homepage: www.elsevier.com/locate/jbf The impact of bond rating changes on corporate bond prices: New evidence from the over-the-counter market Anthony D. May * Price College of Business‚ University of Oklahoma‚ 307 West Brooks‚ Norman‚ OK 73019‚ USA a r t i c l e i n f o a b s t r a c t I study the information content of bond ratings changes using daily corporate bond data from TRACE. Abnormal bond returns over a two-day event window that includes the downgrade (upgrade)
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A corporation may incur miscellaneous costs that are related directly to issuing its capital stock. When related to the initial issuance of stock at incorporation‚ the corporation records these costs as an expense. On the other hand‚ the costs related to later issuances of stock are considered to be normal financing expenditures and reduce the proceeds from the issuances. When a corporation incurs these costs‚ it reduces additional paid –in capital for the amount of the costs. Debt Issue cost:
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