1) Sashi Mashi & Co., a publicly traded food chain, has recently raised significant amounts of new debt by issuing 30-year corporate bonds in the U.S. market. The firm has announced that they will use the cash proceeds from the bond issue to repurchase shares of common equity from stockholders. Your friend is considering investing in Sashi Mashi stock, and consults with you. He would like to know what will happen to the firms ROE, and he would only pursue investments with highest ROE. What is your prediction? What would be your advice to him regarding his investment strategy
2)There are thee major channels through which the businesses in need of funds and savers looking to invest their savings are matched in financial markets. In no more than two sentences for each channel, out of the three, describe what they are, and mention their identifying feature that distinguishes them from the other two. [Hint: we discussed a diagram from Chapter 2 in this regard]