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What types of debt securities has Ross Stores (ROST) issued? What are the current ratings and yields...

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Finance

    1. What types of debt securities has Ross Stores (ROST)issued?
    2. What are the current ratings and yields to maturity for thecompany's debt securities?
    3. What factors do you think explain the yield levels?

    * In the event that none of the companies in your portfolio hasany outstanding bonds, please notify your professor for analternative assignment.

  2. Choose any one of the bonds issued by Ross Stores (ROST) inyour portfolio and make a case for one of thefollowing. Assume a holding period of three to five years.
    1. Its substitution for the company's stock in yourportfolio.
    2. Its addition to your portfolio.
    3. Its exclusion from your portfolio.

Answer & Explanation Solved by verified expert
4.1 Ratings (676 Votes)
Ross Stores Inc NASDAQROST is a largecap stock with amarket capitalization of USD 2750B operating in the ross storesinc together with its subsidiaries operates offprice retailapparel and home fashion stores under the ross dress for less anddds discounts brand names in the united states industry Mostinvestors favour these stocks due to their strong balance sheet andhigh market liquidity meaning there are an adundance of stock inthe public market available for trading These firms wont be lefthigh and dry if liquidity dries up and they will be relativelyunaffected by rises in interest rates Assessing the most recentdata for ROST I will take you through the key ratios to measurefinancial health in particular its solvency and liquidityWhat is considered a high debttoequity ratio differs dependingon the industry because some industries tend to utilize more debtfinancing than others Generally largecap stocks are consideredfinancially healthy if its ratio is below 40 For ROST thedebttoequity ratio is 1388 which means its debt level does notpose a threat to its operations right now While debttoequityratio has several factors at play an easier way to check whetherROSTs leverage is at a sustainable level is to check its abilityto service the debt A company generating earnings at least threetimes its interest payments is considered financially sound ROSTsprofits amply covers interest at 17504 times which is seen asrelatively safe Lenders may be less hesitant to lend out morefunding as ROSTs high interest coverage is seen as responsible andsafe practiceROSTs relatively safe debt levels is even more impressive dueto its ability to generate high cash flow which illustratesoperating efficiency Given that ROSTs financial position maydiffer over time You should continue exploring market expectationsfor ROSTs    See Answer
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What types of debt securities has Ross Stores (ROST)issued?What are the current ratings and yields to maturity for thecompany's debt securities?What factors do you think explain the yield levels?* In the event that none of the companies in your portfolio hasany outstanding bonds, please notify your professor for analternative assignment.Choose any one of the bonds issued by Ross Stores (ROST) inyour portfolio and make a case for one of thefollowing. Assume a holding period of three to five years.Its substitution for the company's stock in yourportfolio.Its addition to your portfolio.Its exclusion from your portfolio.

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