EBK PRINCIPLES OF MANAGERIAL FINANCE
15th Edition
ISBN: 8220106777916
Author: SMART
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 17.11P
Conversion (or stock) value Find the conversion (or stock) value for each of the $1 ,000-par-
| Convertible | Conversion ratio | Current market price of stock |
| A | 22.50 | $42.25 |
| B | 18 | 50.00 |
| C | 20 | 44.00 |
| D | 45 | 19.50 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Conversion (or stock) value What is the conversion (or stock) value of each of the following convertible bonds?
B. A $1,000-par-value bond that is convertible into 12.5 shares of common stock. The common stock is currently selling for $42 per share?
Conversion (or stock) value What is the conversion (or stock) value of each of the following convertible bonds?
A $1,000-par-value bond that is convertible into 25 shares of common stock. The common stock is currently selling for $50 per share.
A $1,000-par-value bond that is convertible into 12.5 shares of common stock. The common stock is currently selling for $42 per share.
A $1,000-par-value bond that is convertible into 100 shares of common stock. The common stock is currently selling for $10.50 per share.
Breuer Investment's convertible bonds have a $1,000 par value and a conversion price of $45 a share. What is the convertible issue's conversion ratio? Round your answer to two decimal places.
Chapter 17 Solutions
EBK PRINCIPLES OF MANAGERIAL FINANCE
Ch. 17.1 - Prob. 17.1RQCh. 17.2 - What is leasing? Define, compare, and contrast...Ch. 17.2 - Describe the four basic steps involved in the...Ch. 17.2 - What type of lease must be treated as a...Ch. 17.2 - Prob. 17.5RQCh. 17.3 - What is the conversion feature? What is a...Ch. 17.3 - When the market price of the stock rises above the...Ch. 17.3 - Define the straight bond value, conversion (or...Ch. 17.4 - What are stock purchase warrants? What are the...Ch. 17.4 - Prob. 17.10RQ
Ch. 17.4 - Prob. 17.11RQCh. 17.5 - Prob. 17.12RQCh. 17.5 - How can the firm use currency options to hedge...Ch. 17 - N and M Corp, is considering leasing a new machine...Ch. 17 - During the past 2 years Meacham Industries issued...Ch. 17 - Newcomb Company has a bond outstanding with a...Ch. 17 - Crystal Cafes recently sold a 1,000-par-value, 1...Ch. 17 - A 6-month call option on 100 shares of SRS Corp...Ch. 17 - Prob. 17.1PCh. 17 - Prob. 17.2PCh. 17 - Loan payments and interest Schuyler Company wishes...Ch. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Lease-versus-purchase decision Joanna Browne is...Ch. 17 - Capitalized lease values Given the lease payments,...Ch. 17 - Conversion price Calculate the conversion price...Ch. 17 - Conversion ratio What is the conversion ratio for...Ch. 17 - Conversion (or stock) value What is the conversion...Ch. 17 - Conversion (or stock) value Find the conversion...Ch. 17 - Straight bond value Calculate the straight bond...Ch. 17 - Determining values: Convertible bond Eastern Clock...Ch. 17 - Determining values: Convertible bond Craigs Cake...Ch. 17 - Prob. 17.18PCh. 17 - Prob. 17.23P
Additional Business Textbook Solutions
Find more solutions based on key concepts
(Interest rate determination) You’re looking at some corporate bonds issued by Ford, and you are trying to det...
Foundations Of Finance
The meaning of implied volatility of a stock. Introduction: Volatility determines the riskiness of a security. ...
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
The way in which the effective annual rate differs from a loan requiring interest payments at maturity and same...
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
The present value of bankruptcy costs and the delta of the firm’s assets. Introduction: A delta is characterize...
Corporate Finance
(PI calculation) Calculate the PI given the following free cash flows if the appropriate required rate of retur...
Foundations of Finance (9th Edition) (Pearson Series in Finance)
The Warm and Toasty Heating Oil Company used to deliver heating oil by sending trucks that printed out a ticket...
Essentials of MIS (13th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Airways common stock is currently priced at $39. its 8 percent convertible debentures issued at their $1,000 par and are currently priced at $1,050. Each debenture can be converted into 25 shares of common stock at any time before 2010. What is the conversion value of the bond? a. $1,000 b. $975 c. $900 d. $1,050arrow_forwardGenesis Company computes Basic E.P.S. as $4.00. Potential dilutors appear to be individually dilutive: convertible preferred at $3.80 and, convertible bonds at $3.84. After inclusion of the convertible preferred, the earnings per share calculation equals $3.88. After inclusion of the convertible bonds also, the earnings per share calculation equals $3.90. Genesis Company would report the following Earnings Per Share: Basic $4.00 and Diluted $3.88. Basic $4.00 and Diluted $3.90. Basic $4.00 and Diluted $3.80. Basic $4.00 only.arrow_forwardComputation of basic and diluted EPS; convertible instruments Kate Corp. had 200,000 ordinary shares, 20,000 convertible preference shares, and P1,000,000 of 10% convertible bonds outstanding during 2021. The preference share is convertible into 40,000 ordinary shares. During 2021, Kate paid dividends of P1.20 per share on ordinary shares and P4.00 per share on preference shares. Each P1,000 bond is convertible into 45 ordinary shares if converted before 2023 and 40 shares if converted after 2023. The profit for 2021 was P800,000 and the income tax rate was 25%. Required: Compute the basic and diluted EPS to be presented in Kate Corp.'s statement of profit or loss for the year ended Dec. 31, 2021.arrow_forward
- Breuer Investment’s convertible bonds have a $1,000 par value and a conversion price of $50 a share. What is the convertible issue’s conversionratio?arrow_forwardA conversion of a face value $1 million convertible bond for $1 million of common stock would most likely be: B . reported as a $1 million fi nancing cash outfl ow and infl ow.arrow_forwardBlueing Airways’ common stock is currently priced at P39. Its 8 percent convertible debentures issued at their P1,000 par and are currently priced at P1,050. Each debenture can be converted into 25 shares of common stock at any time before 2010. What is the conversion value of the bond? Group of answer choices P1,050 P1,000 P975 P900arrow_forward
- A firm has an outstanding bond with a $1,000 par value that is convertible at $40 per share of common stock. If the current market value of common stock per share is $45, the conversion value of the bond is a. 1,000 b. 880 c. 1,125 d. 1,200arrow_forwardbluing Airways common stock is currently priced at 39 its 8 percent convertible debentures at their 1000 par and are currently price at 1,050. each debenture can be converted into 25 shares of common stock at any time before 2010 what is the conversion of the bond 1050 975 900 1000arrow_forwardA firm has an outstanding bond with a P1,000 par value that is convertible into 20 shares of common stock. The bond's conversion ratio is Format: 11arrow_forward
- A convertible bond has a par value of $1,000 and a conversion price of $40. The stock currently trades for $30 a share. What are the bond's conversion ratio and conversion value at t=0? (CR = 25; P (CR) = $30 x 25 = $750)arrow_forwardPreference Shares, Definite Life with Liquidating Value The entity received P4,500,000 cash from the issuance of its 9%, 10-year P5,000,000 par value preference shares.Additionally assume that these shares have a liquidating value of P5,200,000. How much is the cost of the preference shares using the following methods? 1. Yield-to-maturity formula 2.arrow_forwardin 2006, AWW co issued $10 million of $1000 par value, 10% semiannual convertible debentures that come due in 2021. conversion price is 16.75 per share. the common stock was selling for $14 3/4 per share on a given date shortly after these convertibles were issued. these have a B rating (yielding 14% on that date). market price of the convertible was $970 on that date. required: A. conversion ratio, conversion value, B. security value, conversion premiumarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Bonds 101 (DETAILED EXPLANATION FOR BEGINNERS); Author: It's Your Girl Rose;https://www.youtube.com/watch?v=Gskqx8dy9To;License: Standard Youtube License