Suppose you have a choice between two corporate bonds, both of which will give you a payment of $1000 in one year assuming that the corporation is able to meet its obligations. One is a bond from General Motors, the other is a bond from Cisco Systems.

Which of these two bonds would you pay a higher price for? I.e. which of these two corporations should have a lower discount rater?

In recent news, GM has received a junk bond rating. Cisco, I belive, is rated very high. I would pay more for a Cisco bond.

I need some help for my corporate finance course

what is the relevant law relied on by the judge in making his decision

On 11 July 2005 Messrs Brady, Frasca and Paix as lenders made a formal notice of demand for payment to Timentel of an amount of about $247,000. But they gave the company a limited extension of time to repay. Mrs Ehsman's solicitors alleged in correspondence that any attempt to enforce the charge would render it void under s 267 of the Corporations Act, because the chargees were "relevant persons" for the purposes of that section.

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