East Coast Yachts was founded 10 years ago by Larissa Warren. The company’s operations are located near Hilton Head Island, South Carolina.
finance
Description
Instructions:
• The Case Study 3 is due by 11:00 pm CST, April 14, 2020.
• To complete the Case Study 3, you must download the Excel file: Case Study 3 format. o Module 3 > Module 3 Assignments > Case Study 3
• Total scores for the Case Study 3 are 35 points.
• You must submit the Case Study 3 through Blackboard to earn credits.
• Any late submission will not be accepted.
Part 1: Read the following information
East Coast Yachts was founded 10 years ago by Larissa Warren. The company’s operations are located
near Hilton Head Island, South Carolina. The company has manufactured custom midsize, highperformance yachts for clients over this period, and its products have received high reviews for safety and
reliability. The company’s yachts have also recently received the highest award for customer satisfaction.
The yachts are primarily purchased by wealthy individuals for pleasure use.
Dan Ervin was recently hired by East Coast Yachts to assist the company with its short-term financial planning.
After Dan’s EFN (External Finance Needed) analysis for East Coast Yachts, Larissa (the founder of East
Coast Yachts) has decided to expand the company’s operations. She has asked Dan to enlist an underwriter
to help sell $75 million in new 25-year bonds to finance new construction. Dan has entered into
discussions with Kim McKenzie, an underwriter from the firm of Crowe & Mallard, about which bond
features East Coast Yachts should consider and also what coupon rate the issue will likely have. Although
Dan is aware of bond features, he is uncertain as to the costs and benefits of some of them, so he isn’t clear
on how each feature would affect the coupon rate of the bond issue.
Please use the following information to complete the
Part1 – Q1:
• You are Kim’s assistant, and she has asked you to prepare a memo to Dan describing the effect of each of the bond features on the coupon rate of the bond.
• Complete the tasks provided in the Part1-Q1 instruction below this box.
