iven the following information concerning a convertible bond: Coupon: 6 percent ($60 per $1,000 bond) Exercise Price: $25 Maturity date: 20 years Call Price: $1040 Price of the common stock: $30 A. If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent? B. How many shares can the bond be converted into? C. What is the value of the bond in terms of stock?
iven the following information concerning a convertible bond: Coupon: 6 percent ($60 per $1,000 bond) Exercise Price: $25 Maturity date: 20 years Call Price: $1040 Price of the common stock: $30 A. If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent? B. How many shares can the bond be converted into? C. What is the value of the bond in terms of stock?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles
Section: Chapter Questions
Problem 7Q
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Please dont answer in excel i dont understand that stuff yet equations and worded answers only please
Given the following information concerning a convertible bond:
- Coupon: 6 percent ($60 per $1,000
bond) - Exercise Price: $25
- Maturity date: 20 years
- Call Price: $1040
- Price of the common stock: $30
- A. If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent?
- B. How many shares can the bond be converted into?
C. What is the value of the bond in terms of stock?
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