Question
The following facts apply to a convertible bond making semiannual payments: Conversion price $36/share Coupon...
|
The following facts apply to a convertible bond making semiannual payments: |
| Conversion price | $36/share |
| Coupon rate | 5% |
| Par value | $1,000 |
| Yield on nonconvertible debentures of same quality |
7% |
| Maturity | 20 years |
| Market price of stock | $29 /share |
|
What is the minimum price at which the convertible should
sell? |
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