Convertible bonds for financing rather than straight bond

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Reference no: EM131890929

1. What are the pros and cons of using options to compensate employees and why would a company choose to use convertible bonds for financing rather than a straight bond?

2. Assume that you have a bond with a 18-year life, a 6.25 percent coupon rate, semi-annual coupon payments, and discount rate of nine percent. What is the value of the security?

Reference no: EM131890929

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