What are the bonds worth today

Reference no: EM132027298

Question: Pacheco Inc. issued convertible bonds 10 years ago. Each bond had an initial term of 30 years, had a face value of $1,000, paid a coupon rate of 11%, and was convertible into 20 shares of Pacheco stock, which was selling for $30 per share at the time. Since then the price of Pacheco shares has risen to $65 and the interest rate has dropped to 8.8%. What are the bonds worth today? Assume bond coupons are paid semiannually. Round the answer to the nearest cent.

Reference no: EM132027298

Questions Cloud

What are some factors in selecting a strong team : Why is the management team so important to a new business and what are some factors in selecting a strong team?

Desired treatment or perspectives might you encounter : As a manger of a business, what differences in desired treatment or perspectives might you encounter?

Describe evolution of health care information technology : Describe the evolution of health care information technology by identifying key technological advancements in each decade, beginning with the 1960s.

How do we know what different groups or individuals need : How do we know what different groups or individuals need? Perhaps instead of using the golden rule, we could use the platinum rule, which states

What are the bonds worth today : Pacheco Inc. issued convertible bonds 10 years ago. Each bond had an initial term of 30 years, had a face value of $1,000, paid a coupon rate of 11%.

What does desirable treatment look like : In the United States, there is a common proverb-the golden rule-that reads, "treat others as you want to be treated."

What coupon rate will result in a yield to maturity : Pandora Media plans to issue original issue discount (OID) bonds with a 20-year maturity, $1,000 par value, and initial yield to maturity of 8%.

Explain the fundamentals of wlan technology : The Baypoint Group (TBG) needs your help with a WLAN proposal. GHS is a chain of sporting good stores that cater to the sport of soccer.

Evaluate what is the value per common share : Panda Products is evaluating whether it should make an offer for Orman Industries. Panda estimates the value of Orman at $250 million.

User Account

All Pages