User Account

All Pages

Calculate the conversion ratio of the convertible

Assignment Help Finance Basics
Reference no: EM132801829

Information on a convertible bond follows:

Par or face value RM1,000

Coupon rate RM7%

Maturity date 10 years

Conversion Price RM50.00

Price of convertible 95% of face value

Price of the issuer's non-convertible RM800.00

Price of issuer's common stock RM45.00

a. Calculate the conversion ratio of the convertible.

b. Calculate the conversion value of the convertible.

c. What is the stock price at which the conversion value is equal to the straight bond value?

d. Find the premium the holder is paying for the option to buy one share of the common stock.

e. Find the amount the price of the common stock has to appreciate by the bond's maturity date to justify conversion if the holder has the option not to convert.

Reference no: EM132801829

Questions Cloud

What is the break-even level of earnings : What is the break-even level of earnings before interest and taxes between these two capital structure options?
Explain four-forward rates and the swap rate : Explain the relationship between the four-forward rates and the swap rate in a one-year swap that commences next month, given a normal yield curve in the money
Which alternative is best for Jerry Auto Company : Monty Company has offered to sell 10,000 units of the part for $129 per unit to Jerry Auto Company. Which alternative is best for Jerry Auto Company
Find valuation of stock and the corporation : What are the variables associated with the valuation of stock and the corporation?
Calculate the conversion ratio of the convertible : a. Calculate the conversion ratio of the convertible. b. Calculate the conversion value of the convertible.
How the program engages with the youth they serve : Write a two- to three-page analysis of your community and the existing programs for youth within this community using the following guidelines.
Prepare the journal entry to record this transaction : Bobby sells one-half of his partnership interest to Carter for $70,000. Prepare the journal entry to record this transaction in the partnership records
Find the future values of the ordinary annuities : FV of $300 paid each 6 months for 5 years at a nominal rate of 10% compounded semiannually. Do not round intermediate calculations.
Summarize importance of asset to development of all youth : Create a table that identifies the eight categories of human development, summarizes the importance of the asset to the development of all youth, and identify.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd