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  • Corning, Inc Case

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    Ashwani Kumar
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    Corning issued zero coupon convertible debentures due in 2015. There are several advantages to issuing convertible bonds according to the document. It allows Corning to raise funds without immediately diluting control since shares are only issued if converted. The current stock price is below the conversion price so it does not currently dilute earnings per share. It also provides a tax advantage as accrued interest expense can be deducted each year. Investors also benefit from the seniority of debt over preferred and common stock.

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    Corning, Inc Case

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    Corning issued zero coupon convertible debentures due in 2015. There are several advantages to issuing convertible bonds according to the document. It allows Corning to raise funds without immediately diluting control since shares are only issued if converted. The current stock price is below the conversion price so it does not currently dilute earnings per share. It also provides a tax advantage as accrued interest expense can be deducted each year. Investors also benefit from the seniority of debt over preferred and common stock.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    716 views2 pages

    Corning, Inc Case

    Uploaded by

    Ashwani Kumar
    Corning issued zero coupon convertible debentures due in 2015. There are several advantages to issuing convertible bonds according to the document. It allows Corning to raise funds without immediately diluting control since shares are only issued if converted. The current stock price is below the conversion price so it does not currently dilute earnings per share. It also provides a tax advantage as accrued interest expense can be deducted each year. Investors also benefit from the seniority of debt over preferred and common stock.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
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    Corning, Inc: Zero Coupon Convertible Debentures Due November 8, 2015

    Group 3 Abhishek Singh Ashwini Kumar Gaurav Chaudhary Vipul Ambasht

    Advantage of issuing Convertible bonds


    Issuing too many shares will dilute the control over the company The conversion price of 89.06 is above the current price of 71.25, which is currently out of money Deduction of accrued interest expense will help in reducing tax From investors point of view, debt are paid before preferred and common stockholders

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