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
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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
  1. A. If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent?
  2. 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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