Question Details

(Solution) - General Electric Capital a division of General Electric uses l

Brief item decscription

Solution download


Item details:

General Electric Capital, a division of General Electric, uses long-term debt extensively. In a recent year, GE Capital issued $11 billion in long-term debt to investors, then within days filed legal documents to prepare for another $50 billion long-term debt issue. As a result of the $50 billion filing, the price of the initial $11 billion offering declined (due to higher risk of more debt).
Bill Gross, a manger of a bond investment fund, ?denounced a lack in candor? related to GE?s recent debt deal. It was the most recent and most egregious example of how bondholders are mistreated. Gross argued that GE was not forth right when GE Capital recently issued $ 11 billion in bonds, one of the largest issues ever from a U.S. corporation. What bothered Gross is that three days after the issue the company announced its intention to sell as much as $50 billion in additional debt. Warrants, preferred stock, guarantees, letters of credit and promissory notes at some future date.?
In your opinion, did GE Capital act unethically by selling $11 billion of long-term debt without telling those investors that a few days later it would be filing documents to prepare for another $50 billion debt offering?
Source: Jennifer Ablan, ?Gross Shakes the Bond Market; GE Calms It, a Bit,? Barron?s, March 25, 2002.

 







About this question:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Jul 11, 2017

PRICE: $15

Solution~000523607830.zip (18.37 KB)

Buy this answer for only: $15

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.
SiteLock

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now