FIN 300-04, SPRING 2021
APPLE BOND ANALYSIS HOMEWORK
Attached is a Prospectus issued by Apple to facilitate a series of bonds in late 2019. Your responsibilities are to review the Prospectus and answer the following questions.
- What is the total face value of the debt?
- What are the total proceeds to Apple?
- Explain the difference.
- Focus on the $2 Billion 2.050% Notes due in 2026
- What are the semi-annual payments that would be received by a bond holder?
- As the investor, are you guaranteed you will receive these semi-annal payment until the bond expires in September 2026?
- Assume a comparable U.S. Government bond has an interest rate of 1.75%. What does that tell you about the relative risk of the Apple Bond?
- Now focus on the 2029 Apple Note. What is its interest rate? Why is the 2029 interest rate different from the 2026 interest rate?