Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Convertibles
In the summer of 2015, the Hadaway Company was planing to finance an expansion with a convertible security. It considered a convertible debenture but feared the burden of fixed interest charges if the common stock price did not rise enough to make conversion attractive. The firm decided on an issue of convertible preferred stock, which would pay a dividend of $1.06 per share.
The common stock was selling for $20 a share at the time. Management projected earning for 2015 at 1.45 a share and expected a future growth rate of 10% per year in 2016 and beyond. The investment bankers and management agreed that the common stock would continue to sell at 14 times earnings, the current price/earnings ratio.
What conversion price should the issuer set? The conversion rate will be 1.0; that is, each share of convertible preferred can be converted into 1 share of common. Therefore, the convertible's par value (as well as the issue price) will be equal to the conversion price of the common. Assume the present price should be in the range between 20% and 30% and the premium is 25%. Round your answer to the nearest cent.
APT: Say a given market index (M) is a well-diversified portfolio and has an expected return of 15%.
What is the value of a bond that has a par value of $1,000, a coupon rate of 11.81 percent (paid annually), and that matures in 25 years?
Dean Brothers Inc. recently reported net income of $1,500,000. The company has 300,000 shares of common stock, which currently trade at $60 a share. Assuming the company's price/earnings ratio remains at its current level, what will be the company's ..
The coupon interest rate is 8 percent and the market’s required yield to maturity on a comparable-risk bond is 12 percent.
If the stock index is at 1,275.89 on the first payment date, calculate the net swap payment, indicating which party pays it.
How are the balance sheet and income statement related? Discuss the pattern of information flow between these two documents.
A company borrows $81000 at 12% simple interest from State Bank to purchase equipment. State Bank requires the company to make monthly interest-only payments and pay the full $81000 at the end of 5 years. State the monthly interest payment to State B..
Create a simple statement of cash flow for the data provided on a non-profit organization, the organization completely relies on the grants/donations and has no money coming from their services.
Landon Stevens is evaluating expected performance of two common stocks, Furhman Labs, Inc. and Garten Testing, Inc. Calculate the required return for each stock
If you are planning to set aside $8,000 per year you would need to find an investment vehicle that yielded what annual rate per year?
To sustain a high growth? rate, the HFGC CEO argues that the company must continue to invest in projects that offer the highest rate of return possible.
Calculate the incremental rate of return and (b) determine which alternative is better at a MARR of 6% per year over a 20-year study period.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd