Question

. A 9.35%, 18-year convertible bond is selling at $1,095. The bond has a conversion rate...

. A 9.35%, 18-year convertible bond is selling at $1,095. The bond has a conversion rate of 38. The common stock is trading at 23.12. Comparable straight bonds are selling to yield 9 %. The common stock pays an annual dividend of 50 cents per share. Calculate the bond’s conversion value, premium (if any) over conversion value, investment value, and premium (if any) over investment value, and payback period.

How do i do this on excel?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. A 9.35%, 18-year convertible bond is selling at $1,195. The bond has a conversion rate...
1. A 9.35%, 18-year convertible bond is selling at $1,195. The bond has a conversion rate of 38. The common stock is trading at 23.12. Comparable straight bonds are selling to yield 9 %. The common stock pays an annual dividend of 35 cents per share. Calculate the bond’s conversion value, premium (if any) over conversion value, investment value, and premium(if any) over investment value, and payback period.
A certain 7 ?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at...
A certain 7 ?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the? holder's option into 23 shares of common stock. The bond is currently trading at ?$820 . The stock? (which pays 69 ?¢ a share in annual? dividends) is currently priced in the market at ?$36.65 a share. a.What is the? bond's conversion? price? b.What is its conversion? ratio? c.What is the conversion value of this? issue? What is its conversion? parity? d.What is...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 20 shares of common stock. The bond is currently trading at ​$800. The stock​ (which pays 72​¢ a share in annual​ dividends) is currently priced in the market at ​$36.34 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
A certain 5​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 5​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 17 shares of common stock. The bond is currently trading at ​$790. The stock​ (which pays 77​¢ a share in annual​ dividends) is currently priced in the market at ​$33.71 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 20 shares of common stock. The bond is currently trading at ​$800. The stock​ (which pays 65​¢ a share in annual​ dividends) is currently priced in the market at ​$30.91 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
A certain 7?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the?...
A certain 7?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the? holder's option into 23 shares of common stock. The bond is currently trading at ?$820. The stock? (which pays 92?¢ a share in annual? dividends) is currently priced in the market at $35.87a share. a.??What is the? bond's conversion? price? b.??What is its conversion? ratio? c.??What is the conversion value of this? issue? What is its conversion? parity? d.??What is the conversion? premium, in...
A certain 5% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 5% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 17 shares of common stock. The bond is currently trading at $790. The stock​ (which pays 56¢ a share in annual​ dividends) is currently priced in the market at ​$33.79 a share. QUESTIONS: HUGE THUMBS UP FOR CORRECT ANSWERS a. The​ bond's conversion price is (blank) $ ? (Round to the nearest​ cent.) b. The conversion ratio is (blank) shares ?   ...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 20 shares of common stock. The bond is currently trading at $800. The stock​ (which pays 85​¢ a share in annual​ dividends) is currently priced in the market at $35.68 a share. a. What is the​ bond's conversion​ price? (Round to the nearest​ cent.) b. What is its conversion​ ratio? (Round to the nearest​ integer.) c. What is the conversion value...
. Dash Incorporated has the following convertible bond outstanding: Coupon 5% Principal $1,000 Maturity 12 years...
. Dash Incorporated has the following convertible bond outstanding: Coupon 5% Principal $1,000 Maturity 12 years Conversion price $33.34 Conversion ratio 30 shares Call price $1,000 + one year’s interest = 1050 The bond’s credit rating is BB, and comparable BB-rated bonds yield 9 percent. The firm’s stock is selling for $25 and pays a dividend of $0.50 a share. The convertible bond is selling for $1,000 If the bond is not converted, what does the investor receive when the...
A(n) 9% Convertible bond carries a par value of $1,000 and a conversion ratio of 21....
A(n) 9% Convertible bond carries a par value of $1,000 and a conversion ratio of 21. Assume that an investor has $5,000 to invest and that the convertible sells at a price of $1,000 (which includes a 28% conversion Premium). How much Total Income (coupon plus capital gains) will this investment offer if, over the course of the next 12 months, the price of the stock moves to $88.49 per share and the convertible trades at a price that includes...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT