Company has convertible bond in its capital structure

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Reference no: EM131619386

1. When a company has a convertible bond in its capital structure,

it can reduce its debt-to-equity ratio by calling the bond.

there is no effect on the firm's earnings per share.

there is no advantage to the firm in forcing conversion of the bonds.

All of these options

2. You have purchased a currency put option on Euros representing a contracted amount of 100,000 euros. The exercise price for a Euro is $1.270 and the put option premium on the euro is .013 per unit. What would the exchange rate need to be for you to have a net profit of $0 (i.e. the breakeven exchange rate)

a. $1.283

b. $1.257

c. $1.270

d. $1.400

Reference no: EM131619386

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