solution

At the Market Insight Company page enter the stock ticker symbol HLT for Hilton Hotels Corporation and do the following:

a. Review the recent Industry Outlook (in the S&P Stock Reports section) for the Hotels, Resorts, and Cruise Lines subindustry. What is the outlook for hotels? How might the outlook affect outstanding debt and the issuance of new debt?

b. Review the variety of Hilton bonds and notes outstanding that are listed in the latest EDGAR 10K report for Hilton. Use the Edit, Find on This Page menu and search for the term “bond” to fi nd the list about halfway through the document. How does the company’s debt structure in the current year compare with its debt structure in the previous year? Based on the types and maturities of bonds outstanding, how much interest rate risk do the bondholders face?

c. What percentage of the debt issues outstanding represents current liabilities? How did the percentage change during the past year?

d. Go to http://bonds.yahoo.com, and search for the Hilton bonds. What are the current ratings and yields to maturity for Hilton’s debt securities? Use the prices and the coupon rates shown to perform calculations to confi rm the Current Yield shown for each bond.

e. What type of investor would be interested in these bonds? For what kinds of portfolios would they be inappropriate?