Calculate the total return in dollars

Assignment Help Business Management
Reference no: EM132634887

You bought an XYZ corp $1,000, 5% convertible bond for $1,000. It has a conversion feature allowing you to convert the bond into 50 shares of XYZ common stock.

(a) At what stock price would converting the bonds into stock result in a break even trade?

(b) One year from now, the stock price is $25. Convert the bond, sell the stock at $25, add in the bond interest, and calculate the total return in dollars and as a yield of the original $1,000 investment.

Reference no: EM132634887

Questions Cloud

Find equivalent units for material and conversion : During October, 7 600 leather strips placed into production. A total of 7 000 leather belts were completed. Find Equivalent units for material and conversion
What must the current spot rate ea-b be : Currency A per unit of currency B (a.k.a. EeA/B = 88). What must the current spot rate EA/B be if there are no arbitrage opportunities? Use the full UIP formula
Relationship between a bank capital ratio : A bank with a leverage ratio of 20 has a cost of debt of 1.5%pa and a portfolio of assets with an expected yield of 3.5%pa.
How would one exploit : E$/€ is 1.1 dollars per euro. The one year forward rate F$/€ = 1.2. Is there an arbitrage opportunity here, and if so, how would one exploit it?
Calculate the total return in dollars : Convert the bond, sell the stock at $25, add in the bond interest, and calculate the total return
Describe one type of natural disaster : Identify and describe one type of natural disaster that could occur in your region ( saudi). Write down your answer with supporting examples and explanations.
What are the expected ROA net of debt funding costs : What are the expected ROA net of debt funding costs and the expected ROE of the bank, using the approach to defining leverage taken in the lecture slides
What must the forward rate be for covered interest parity : Spot rate of dollars per euro E$/€ is 1.2. The interest rate in the eurozone is 1%. What must the forward rate F$/€ be for covered interest parity to hold?
Why resources are important in population health promotion : Explain why it is important to appraise community resources (nonprofit, spiritual/religious, etc.) as part of a community assessment and why these resources.

Reviews

Write a Review

Business Management Questions & Answers

  How many months are required to repay the loan

Jefferson qualifies for an income-adjusted monthly payment of $475. If Jefferson has a subsidized student loan of $43,000

  Determining the world trade organization

Conduct an Internet search to find and read at least 3 recent articles that relate to the key term you selected. Articles may be found in the International.

  What are the trends and major sources of fdi

What are the trends and major sources of FDI? Which are the major forms of FDI?

  Uncharacteristic fit of temper

At the end of the conference, Megan knew she had made a mistake. She told Jan she was tired and angry at the lack of action from her senior vice presidents. She knew she should not have announced her concerns to the employees but had done so in an..

  Purpose of sending the new hire employee handbooks

After an applicant has accepted a position with a hiring company, what is the purpose of sending the new hire employee handbooks and company

  Setting up a calculator funtion

Can you show me the details in setting up a calculator funtion either using Python or Flowchart model using multiplication , add, subtract and minus.

  Methods to overcome initial resistance to change

Managers can adopt various methods to overcome initial resistance to change. In which method does management neutralizes potential or actual resistance by exchanging something of value for cooperation?

  What is the purpose of a hypothesis test

What is the purpose of finding the linear correlation between two variables?

  Food and beverage management techniques

What regulatory agencies monitor the food and beverage industry and what effect do regulations mandated by these agencies have on a food and beverage operation's management?

  Why is emphasis on the customer so critical for quality

Why is emphasis on the customer so critical for quality? Why is customer satisfaction called the key performance measure of TQM success?

  What new training programs and processes would you propose

As the HRD manager for your organization, what new training programs and processes would you propose to senior management to develop effective training and conflict resolutions methods.

  Determine the credibility of the information presented

How you were able to determine the credibility of the information presented in the article? Describe how you might use this article in your professional work.

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!

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