Consider converting bond to the company common stock

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Reference no: EM132011694

1. list three DETAILED examples on how an ownerships right could not be exercised. (Hints: disclosure of financials, share of revenue, appointment of board of directors)

2. A $1,000 corporate bond is convertible to 10 shares of the corporation's common stock. What is the minimum price that the stock must obtain before bondholders would consider converting a bond to the company's common stock?

3. A firm is scheduled to earn $1.73 per share over the next year. Since the firm has an ROE of 17.8%, which is greater than the capitalization rate of 9.47% estimated using CAPM, management has decided to reinvest 34% of the firm's earnings back into the firm in order to generate future growth. Whatever the firm does not reinvest into the business it pays as dividends to shareholders. Calculate the firm's PVGO.

Reference no: EM132011694

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