The stock price and to the convertible bond price

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Suppose the previously outlined projects work out on schedule for 2 years, but then O'Brien begins to experience extremely strong competition from Japanese firms. As a result, O'Brien's expected growth rate from 10% to zero. Assume that the dividend at the time of the drop is $3.04. The company's credit strength is not impaired, and its value of is also unchanged.

What would happen (1) to the stock price and (2) to the convertible bond's price? Be as precise as you can. Round your answer to the nearest percent. Percentage decline in stock price is %. Percentage decline of % in the value of the convertible.

Reference no: EM131931874

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