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Five years ago, the Williams Company issued $10 million of convertible bonds with a par value of $1,000 each and a coupon rate of 6%, and with each convertible into 20 shares.
They will mature twenty years from now. The stock is now trading at $60 per share. The market interest rate is 8%.
1. What is the conversion price?
2. What is the conversion value?
3. What is the conversion ratio?
4. What is the pure bond value?
Find the duration of a 8.0% coupon bond making semi annually coupon payments if it has 3 years until maturity and has a yield to maturity of 8.0%. What is the duration if the yield to maturity is 10.0%?
If the required return is 11 percent and the company just paid a dividend of $1.45, what is the current share price?
Your family includes 3 children who are 12, 10 and 8 years old. Discuss how you would proceed in making such a decision. State all assumptions.
Reliable Electric is a regulated public utility, and it is expected to provide steady growth of dividends of 5% per year for the indefinite future. Its last dividend was $3 per share; the stock sold for $50 per share just after the dividend was paid...
Norman Inc. is considering two mutually exclusive projects.
The company’s marginal tax rate is 35%. What is the project’s annual after-tax operating cash flow?
Cox Media Corporation pays a coupon rate of 7 percent on debentures that are due in 10 years. The current yield to maturity on bonds of similar risk is 6 percent. The bonds are currently callable at $1,070. Find the market value of the bonds using se..
Dorothy K leased space . Runs out of cash. Late payments on orders, problems with suppliers. Planning to borrow $. Cash budget : Sales are made based on cash only. purchases must be aid during following month. Prepare cash budget for Dec Jan Feb. Sup..
A Smith industry has $24,000 in deposits that have been recorded by Smith but not by its bank. Smith also has $22,450 in outstanding checks that have not yet cleared the bank. Current balance is $14,400. Find: Net float. Is this desirable? Explain.
The bonds are currently quoted at 99 percent of face value. What is Ernst's pre-tax cost of debt?
In the Jackson Automotive Systems Case Part 1: Why can’t a profitable company like Jackson repay its loan on time? What major company developments between August 2012 and May 2013 contribute to this situation? Should the bank extend the maturity of t..
The MACRS table values .2000, .3200, .1920, .1152, .1152, and .0576 for Years 1 to 6, respectively. What is the current book value of these assets?
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