• American University in Dubai

• MBA 4084

What are the cash payments associated with the Sleeping Beauties? Who gets how much and when, per $100 of bonds issued? Sleeping beauty bonds were issued for 100 years for a total amount of $300 million. The bonds were issued for a $100 par value. Therefore, total number of bonds that were issued by Disney Company was three million. Bonds were issued at an interest rate of 7.55%, payable semiannually by the company to bond holders. Therefore, 3.775% (7.55%/2) of the par value of bond were paid after every six months to the bond holders by the company. Coupon payments in dollar terms paid by the company to bond holders were $3.775 per bond. The bond will mature after 100 years in 2093, and bondholders will get their principal payment of $100 per bond along with last coupon payment. However, if interest rates are less than 7.55% after 2023, company is very likely to exercise the call option and repay bond holders by paying 103.02% of the face value of bonds. In that case, bond holders will get $103.02 per bond, if the company chooses to exercise the call option.