Groupon IPO

Please read the following article and blog about it by class time Tuesday. Be sure to think about everything we talk about in class.

Also, please think/blog about the following quote from the article and what it may mean:
Groupon said it had "determined that projected cash flow from future operations would be sufficient to support our growth strategy."

http://www.chicagotribune.com/business/technology/chi-groupon-prices-ipo-expects-to-raise-abot-540m-20111021,0,6271092.story

Municipal Bonds and Deficits

This article is very interesting and ties very well into our unit on valuing bonds. Municipalities have been a very concerning topic in recent times. Many fear that Municipals will default, meaning they will not be able to payout their bonds. It is very important to understand that Municipal bonds are sometimes very intriguing to investors because you do not have to pay any tax on them. That is why the rates are typically low. However, lately the rates on Munies have been pretty high and that is because with more risk, investors want more return. Therefore, if a Municipal's default risk is going up, the need to issue a bond that pays more interest. This is where risk aversion comes into play. How risk averse are you?

Please read the following article and blog about it by next Thursday, class time.
http://finance.yahoo.com/real-estate/article/113588/american-cities-going-broke-247wallst