do you think this process is reasonable and why/whynot?   September 2019     $4,500,000 September 2020.    $5,050,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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As an analyst for a big technology company. The company has decided that this is the time to retire some of its debt. The company has decided the best way to do this is if us government bonds are used to match the principle as well as the interest payments on the liabilities chosen. Set up a strategy to accomplish this showing your work and discussion your result.  do you think this process is reasonable and why/whynot?

 

September 2019     $4,500,000

September 2020.    $5,050,000

September  2021.   $3,750,000

September 2022     $6,450,000

 

The Government debt 

1.50% coupon due September 2019

1.75% coupon due September 2020

2.35% coupon due September 2020

2.6% coupon due September 2021

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