Calculate the conversion price and conversion value

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Reference no: EM133674226

Question

In December 2022, Collingwood Corp. decided to issue 100,000 convertible bonds, maturing in December 2032. The bonds have a face value of $1,000 and promise an annual coupon payment of 5.75 percent. The conversion ratio of these bonds is 25.32, and it is known that Collingwood Corp.'s common shares were trading at $34 in December 2022. These bonds are rated A-, and straight bonds from similar companies with similar maturity yield 9 percent. The current market price of these bonds is $1,051. Calculate the conversion price, conversion value, SBV, floor value, and conversion premium for these bonds.

Reference no: EM133674226

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