Calculate parity price stock

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1) You hold a convertible bond that allows you to exchange it with 30 shares of stock ABC starting with the 3rd year of bond issuance. The table below shows market prices of bond and stock. Indicate whether you plan to excercise the conversion option and switch out of the bond and into the stock in each case. Calculate Parity Price Stock

Month        Market Stock Price         Market Bond Price                 Convert? (Yes or No)       
1                       33                                      999                                                                                                                       
2                       36                                      1010
3                       35                                      1001
4                       28                                       960
5                       25                                       950

2) You are buying today (Oct 22, 2021) bond ABC 5% Jan 15, 2028  issued on Jan 15 2018 that pays coupons semi-annually.  The clean purchace price is 100.25.  Calculate the dirty price that you will need to pay on the settlement day to your counterparty.

Reference no: EM133070766

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