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Investment Strategy #3: Bonds Paper

1379 words - 6 pages

In this final research paper of investment strategies, we will examine bonds. "A bond is a contract between the borrowing company (issuer) and the lender (investor) in which the borrower promises to pay a specified amount of interest at the end of each period the bond is outstanding and to repay the principal at the maturity date of the bond contract" (Albrecht, Stice, Stice, & Swain, 2005, p. 538). For this final week our team is given $10,000.00 to invest in either Corporate and/or Municipal bonds.As previously stated our team goal is to focus on return on investment (ROI). With that in mind we aim to select bonds that are trading at a discount rate and have a bond rating of BBB or ...view middle of the document...

00/bond plus the return on investment.g.Why Sprint was selected: Sprint is a leader in the wireless market with a solid balance sheet reported year over year (Yahoo Finance, 2007).Sabre Holdings Corporation (Sabre Holdings) is engaged in travel commerce. Through its subsidiaries, the Company offers a portfolio of travel marketing, distribution and technology solutions. Sabre Holdings supports airlines, hotels, cruise lines, car rental agencies and other travel suppliers through a distribution network. The Company supports online and conventional travel agencies, corporate travel purchasers and consumers by providing an electronic marketplace that consolidates a wealth of travel information, and facilitates shopping and purchasing of travel components and packages. Sabre Holdings participate in travel distribution and marketing to multiple audiences through different methods (channels). These channels include travel agencies, direct to consumers and corporate or business-direct. The Company operates in three segments: Sabre Travel Network, Travelocity and Sabre Airline Solutions (Reuters, 2007)a.Name and company stock ticker symbol: Sabre Holding Corp - TSGb.Where the bond is listed: Over the counterc.How Sabre Holding Corp fits within the investment strategy: Sabre is selling at a discount and meets our investment strategy of ROI.d.Price at purchase: 99.50 ($995.00)i)Yield: 7.387%ii)Coupon rate: 7.35%iii)Date to maturity: August 1, 2011iv)Premium/discount: Currently the bond is selling at a discount.v)Rating: BBBe.Number of bond purchased: 2f.Expected return on investment: If the bonds are held till maturity @ a coupon rate of 7.35%, the yield is $590.96/bond plus the return on investment.g.Why Sabre holding was selected: Sabre holdings bonds are an excellent value and the coupon rate was the highest rated in the BBB rated category (Yahoo Finance, 2007).Clear Channel Communications, Inc. operates as a diversified media company. It operates in two segments, Radio Broadcasting and Outdoor Advertising. The Radio Broadcasting segment includes radio stations, for which it operates as a licensee, as well as programs or sells airtime under local marketing agreements or joint sales agreements. The Outdoor Advertising segment owns or operates outdoor advertising display faces in the United States and Internationally in Europe, Australia, Asia, and Africa. The company owned or operated 164,634 Americas outdoor advertising display faces and 710,638 international outdoor advertising display faces, as well as owned 41 television stations, as of the above date. It also owns a media representation firm that sells spot advertising time for clients in the radio and television industries in the United States (Yahoo Finance, 2007).a.Name and company ticker symbol: Clear Channel Communications - CCUb.Where bond is listed: Over the counterc.How Comcast Cable Communications fits within team strategy: Bond with minimum BBB...

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