Company has convertible bond in capital structure

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1. When a company has a convertible bond in its capital structure, all of these options are correct. there is no advantage to the firm in forcing conversion of the bonds. it can reduce its debt-to-equity ratio by calling the bond. there is no effect on the firm's earnings per share.

2. Calculate the bond yield in the following scenario: Two years ago, Walters Electronics Corporation issued 20-year bonds at a coupon rate of 6.75 percent. The bonds make semiannual payments, and currently sell for 106 percent of par value. Calculate the YTM.

Reference no: EM132057945

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