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 |
If the bond is not converted: | |||||||||||
Fv | Amount investor receives at maturity | $1,000 | |||||||||
Pmt | Annual coupon received | $50 | (1000*5%) | ||||||||
Nper | Number of years to maturity | 12 | |||||||||
Pv | Issue price | $1,000 | |||||||||
RATE | Annual return on the investment | 5.00% | (Using RATE Function of excel with Nper=12,Pmt=50, Pv=-1000, Fv=1000) | ||||||||
Excel Command:RATE(12,50,-1000,1000) | |||||||||||
Amount received when bond matures | $1000 | Annual Return | 5% |
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