You own a convertible corporate bond that has a par value of R1000. You are considering exercising the embedded option, which has a conversion price of 106. If the firm's share price is currently 180.23, what is the conversion value of your bond? Provide your answer in Rands (R), correct to TWO decimal places. However, do not write the sign (R) only write down the value and do not leave any spaces between numbers.
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You own a convertible corporate bond that has a par value of R1000. You are considering exercising the embedded option, which has a conversion price of 106. If the firm's share price is currently 180.23, what is the conversion
Provide your answer in Rands (R), correct to TWO decimal places. However, do not write the sign (R) only write down the value and do not leave any spaces between numbers.
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- Suppose you own a convertible bond that has a conversion ratio equal to 62. Each convertible bond has a face value equal to $1,000. The current market value of the company's common stock is $16, and the bond is selling for $1,042. If you want to liquidate your position today because you need money to pay your rent, should you sell the bond or should you convert the bond into common stock and then sell the stock? Explain your answer. Round your answers to the nearest dollar. Selling the bond would generate $_______ . Converting the bond and selling the common stock would generate $_______ . Thus, it would be better to SELL THE BOND / CONVERT THE BOND INTO COMMON STOCK AND THEN SELL THE STOCKSuppose you own a convertible bond that has a conversion ratio equal to 58. Each convertible bond has a face value equal to $1,000. The current market value of the company's common stock is $17, and the bond is selling for $1,036. If you want to liquidate your position today because you need money to pay your rent, should you sell the bond or should you convert the bond into common stock and then sell the stock? Explain your answer. Round your answers to the nearest dollar. Selling the bond would generate $ . Converting the bond and selling the common stock would generate $ . Thus, it would be better to .Susan is looking into a convertible bond but does not know how to value this bond. The bond has a $1,000 face value and a conversion ratio of 36. What is the conversion price? If the stock price is $42, what is the conversion value? What is the downside risk percentage of the bond if the current price is $1,250 and the investment premium is $861.53? Is this risk concerning? The stock is currently selling for $42 per share. The issuer of the bond has announced a call; the call price is 108. What are your options here? What should you do?
- Please dont answer in excel, im not familiar with that yet, equations are great or if the problem merits a worded answer, thank you) Given the following information concerning a convertible bond: Principle: $1,000 Coupons: 5 percent Maturity: 15 years Call Price: $1,050 Conversion price: $37 (i.e., 27 shares) Market Price of the Bond: $1040 Common stock: $30 D, What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock?D E, Nonconvertible bonds are selling with a yield to maturity of 7 percent If this bond lacked the conversion feature, what would the approximate price of the bond be? F, What is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? G, What is the probability that the corporation will call this bond? H, Why are investors willing to pay the premiums mentioned in questions d and f?please dont answer in excel as i do not understand that yet, equations or worded answers please, thank you. 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 F. What do investors receive if they do not convert the bond when it is called? G. If the bond were called, would it be advantageous to convert?(please dont answer in excel as im not familiar with that yet, equations and worded answers 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 If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent? How many shares can the bond be converted into? What is the value of the bond in terms of stock? 4. What is the current minimum price that the bond will command
- (please dont answer in excel im not familiar with it yet, equations I am familiar with and or worded answers) Given the following information concerning a convertible bond: Principle: $1,000 Coupons: 5 percent Maturity: 15 years Call Price: $1,050 Conversion price: $37 (i.e., 27 shares) Market Price of the Bond: $1040 Common stock: $30 What is the current yield of this bond? What is the value of the bond based on the market price of the common stock? What is the value of the bond based on the market priced of the bond? What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock?Please dont answer in excel i dont understand that yet. Given the following information concerning a convertible bond: Principle: $1,000 Coupons: 5 percent Maturity: 15 years Call Price: $1,050 Conversion price: $37 (i.e., 27 shares) Market Price of the Bond: $1040 Common stock $30 D. What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? E. Nonconvertible bonds are selling with a yield to maturity of 7 percent If this bond lacked the conversion feature, what would the approximate price of the bond be? F. What is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond?please do not answer in excel as i do not understand that yet, equations and worded answers please, thank you 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 D. What is the current minimum price that the bond will command? E. Is there any reason to anticipate that the firm will call the bond? F. What do investors receive if they do not convert the bond when it is called? G. If the bond were called, would it be advantageous to convert?
- please do not post answer in excel as i do not understand that yet, please answer only with an equation or worded answer. 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?please dont answer in excel i dont understand that only equations and worded answers 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 F. What do investors receive if they do not convert the bond when it is called? G. If the bond were called, would it be advantageous to convert?please dont put in excel i dont understand that yet Given the following information concerning a convertible bond: Principle: $1,000 Coupons: 5 percent Maturity: 15 years Call Price: $1,050 Conversion price: $37 (i.e., 27 shares) Market Price of the Bond: $1040 Common stock: $30 D.What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? (I already have an answer for D) E.Nonconvertible bonds are selling with a yield to maturity of 7 percent If this bond lacked the conversion feature, what would the approximate price of the bond be? F.What is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? G.What is the probability that the corporation will call this bond? H.Why are investors willing to pay the premiums mentioned in questions d and f?