Dandelion Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Dandelion Company Case Study Analysis

T-Notes

T-Notes have long life from approximately 2 to 10 years, where the company invests. T-Notes are also issued and get matured at the par value or face value. Normally, the payment of interest is also made semi-annually, but not at the maturity as T-Bills.

TIPSs

The treasury inflation-protected securities are also a type of treasury security that is issued by the US government. These securities are issued that are indexed and protect the investors from the decrease of their buying power. Prices are also adjusted by TIPS to maintain the real value.

Agency

It is also a type of security in which the company invests. Agency security is a low-risk obligation commitment that is given by the U.S. government-sponsor enterpriseor other governmentally related entity.

Asset-backed

ABS or asset-backed security is a bond through which the issuer generates cash and that cash can be used for lending. This means that it is an opportunity for investors to play with income-generating assets. These asset-backed can be of any asset but with revenue streams, such as: loans or receivables. Asset-baked, when compared with other securities is not liquid. Also, the prices of the asset-backed are not clear and the reason for this is that the asset-backed is not as standardized as a mortgage-backed security or the US treasury. So it is different from other securities.

Mortgage-backed

Mortgage-backed security or MBS is the same as bonds. This is made by the number of loans that are bought from the banks. Like the coupon payments of bonds, investors of mortgage-backed also take payments periodically, and these payments are fixed. The cash flow of this security is irregular because of the variations in the speed and timing of the principal repayments. The company uses this security asit is important for the cost of housing in the US.

Corporate Bonds

It is also security that firm issues and sells. The company takes capital and the investor is paid with interest in return, with a fixed or variable rate, and the interest is paid semi-annually. These bouts will also mature within 30 years.

Valuation

There are three types of valuation techniques that the company might use as the ASC 820, whichis not a good technique.

Cost Approach

This approach is a valuation method, which shows that the price of an asset is equal to the cost of the asset. It is the amount that is required to replace the serviceability of an asset. This method might help the auditors.

Income Approach

This approach is a real estate appraisal type that allows the investors to evaluate the worth of the property. This valuation technique has two methods: one is the cash flow method and anotherone is the discounted cash flow method. This method is useful as it changes the future amount into the current account.

Market Approach

This approach can also be used by the company,as it uses amounts and related information that are generated by the market.............................

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