Debt and Equity Characteristics Simulation

Essay by davelong13University, Bachelor'sA, August 2007

download word file, 10 pages 0.0

Investment bankers act as intermediaries between corporations in need of funds and the investing public. They provide advice on the financing option to select, the number of shares or units for distribution, and the timing of the sale. Investment bankers also often take the risk of successfully distributing corporate options. This makes it imperative for the investment banker to price the options appropriately, while ensuring that the organization’s requirements are met.

In this paper, Team A will evaluate equity and debt instruments from both Intel and Boeing.

Intel Corporation SummaryIntel Corporation is the world’s largest semiconductor chipmaker, bases solely on revenue and have been incorporated in California since 1968 and reincorporated in 1989. As with all companies, the need for capital is important and used debt and equity instruments to raise money as needed.

Boeing Corporation Summary“Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined.

Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems.” (2007) Boeing is involved with many industries where capital outlays and debt are intensive; therefore, there debt structure carries both short and long-term obligations even though cash flows are strong.

Intel’s Short-Term DebtShort-term debt current exists of $178,000,000 in draft financing which is defined as “An unconventional order in writing-signed by a person, usually the exporter, and addressed to the importer-ordering the importer or the importer's agent to pay, on demand (sight draft) or at a fixed future date (time draft) the amount specified on the face of the draft” ( Another $2,000,000 of short-term debt is represented by the current portion of long-term debt as of December 31, 2007. The total amount of short-term debt for Intel Corporation is $180,000,000.

Boeing’s Short Term DebtBoeing’s short-term...