Find the conversion premium in dollars and in percent

Assignment Help Finance Basics
Reference no: EM13259978

Xilinx, a company in the semiconductor industry, has a $1,000 convertible bond with a conversion ratio of 32.076 and a coupon of 3.125%. The bond is currently priced at $751. Xilinx stock trades at $19.25, and pays an annual dividend of $0.56.

a. Find the conversion value of this bond. Explain what this means.

b. Find the conversion premium in dollars and in percent.

c. Find the payback period. Explain what this means in your own words without quoting the definition of payback period. In addition, state whether or not this is considered to be an acceptable payback period.

 

Reference no: EM13259978

Questions Cloud

What is the speed of the spaceship : The length of a moving spaceship is 25.6 m according to an astronaut on the spaceship. what is the speed of the spaceship
Find the modified duration of each bond : If market interest rates rise by 0.75%, find the percent change in the price of each bond. Express your answers as percentages rounded to two decimal places.
Describe process you would follow to shortlist suppliers : Describe the process you would follow to shortlist suppliers for this purpose. How will you determine if the supplier is an approved National Health Service (NHS) supplier?
What is the linear speed of the disk : Suppose a disk of radius R and mass M starts from rest at a height of 2.5m, What is the linear speed of the disk when it leaves the incline
Find the conversion premium in dollars and in percent : Find the payback period. Explain what this means in your own words without quoting the definition of payback period. In addition, state whether or not this is considered to be an acceptable payback period.
What would a fully-taxable corporate bond have to yield : What would a fully-taxable corporate bond have to yield in order to produce the same after-tax return as the 5% municipal bond? Show work. Express your answer as a percentage rounded to two decimal places.
Calculate the current yield on this bond : What dollar amount of interest will he receive from this bond every six months? Explain or show work.
Find the flow speed of the medicine through the needle : A 3.5 mL syringe has an inner diameter of 5.0 mm, a needle inner diameter of 0.24 mm, and a plunger pad diameter, The nurse empties the syringe in 2.3 s. What is the flow speed of the medicine through the needle
Job order costing system : Finlon Upholstery, Inc. uses a job order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31, 20x1, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no ..

Reviews

Write a Review

Finance Basics Questions & Answers

  Establish pmpm rate for primary care physicians

Actuarial estimates project 2,500 visits per 1,000 persons per year. You have contracted with a Primary Care Medical group at dollar 45.00 per visit with a dollar 5.00 co-payment that you will receive.

  Calucate the expected return and standard deviation

Suppose the expected returns and standard deviations of stock A and stock B are E(R)=0.15, E(R)=0.25, deviation is A=0.1,B=0.2.

  Relative comparison approach

Determine liquidity ratios and who are the primary users of the ratios and explain why they are important from a relative comparison approach?

  Compute the degree of operating leverage

Moe & Chris' Delicious Burgers, Corporation., sells food to University Cafeterias for $15 a box. The fixed costs of this operation are $80,000, and variable cost per box is $10.

  Time value of money for retirement

How much will Ashley be able to withdraw each month during retirement? Instead of 6.00% what would Ashley's rate-of-return after retirement have to be so that she could withdraw $3,500 a month and still leave the same amount for the student lounge?

  What is the profitability index

ABC is reviewing a project that will cost $2,081.The project will produce cash flows $594 at the end of each year for the first two years and $784 at the end of each year for the next three years. What is the profitability index? Assume interest rate..

  Calculate the company horizon value

A company estimates the following free cash flows during the next three years, after which FCF is expected to grow at a constant 6 percent rate.

  Present value of future cash flow

A company anticipates taxable cash receipt of $70,000 in year five of project. The company's tax rate is 30% and its discount rate is 12%. The present value of this future cash flow is closest to:

  Are these methods effective

What methods can be used by the FED to influence interest rates? Are these methods effective? Use examples where appropriate.

  Compute the annual cash revenues

An oil corporation is drilling a series of new wells on the perimeter of a producing oil field. About 20% of new wells will be dry holes. Even if a new well strikes oil, there is still uncertainty about the amount of oil produced:

  Find appropriate quote and calculate the price

As the cash manager of your firm, you wish to buy $1,000,000 in thirty day Treasury bills. You obtain the following bid/ask quotes from three dealers:

  Determine the annual net cash cost of borrowing

Ron's Pharmacy has collected $600 in sales taxes during the March. If sales taxes must be remitted to state government monthly, what entry will Ron's Pharmacy create to demonstrate the March remittance?

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