User Account

All Pages

What is the conversion price of as stock

Assignment Help Financial Management
Reference no: EM132068262

Question

A Corporation just sold $30 million of convertible bonds with a conversion ratio of 40. Each $1,000 bond is convertible into 25 shares of A's stock.

a. What is the conversion price of A's stock?

b. If the current price of Zippy's stock is $15 and the Company's annual stock return is normally distributed with a standard deviation of $5, what is the probability that investors will find it attractive to convert the bond into Zippy stock in the next year?

Reference no: EM132068262

Questions Cloud

Comprise the competitor current persona : In this assignment, you are asked to explore the Nike brand and compare it to its greatest competitor.
Determine the number of clusters in the data : COSC2110 - Data Mining - RMIT University - What is the effect of lowering the number of examples in the training set? Include your runs in your table
Calculate the expected amount of total assets : Calculate the expected amount of total assets (in $ billion) for the end of next year. Assume that the percentage of total assets to sales is expected .
Derive the projects free cash flows to the firm : Derive the project's free cash flows to the firm for each year of the proposed investment (including the initial investment outlay).
What is the conversion price of as stock : A Corporation just sold $30 million of convertible bonds with a conversion ratio of 40. Each $1,000 bond is convertible into 25 shares of A's stock.
Write a report to the board of directors : FINM036 : Write a report to the board of directors of one of the selected companies below as part of the interview process for your first appointment .
Evaluate financial feasibility of the project using : Conduct sensitivity analysis by determining the effect on NPV of the followingchanges: Demand for the new line of components falls by 5%.
Prepare a sheet to report on the different perceptions : Design a (10 question) questionnaire based on this information, and survey a sample of students (at least 20).
Find the monthly holding period returns : Find the monthly holding period returns for 2016 for National Australia Bank (NAB), BHP Billiton (BHP) and the market (MKT) as proxied by the All Ordinaries.

Reviews

Write a Review

Financial Management Questions & Answers

  Subscription to czar magazine is about to expire

Your subscription to Czar Magazine is about to expire. You plan to subscribe to the magazine for the rest of your life, and you can renew it by paying $85 annually, beginning immediately, or you can get a lifetime subscription for $1000, also payable..

  A basic interest rate swap is priced as a zero

A basic interest rate swap is priced as a zero net present value transaction. Explain what this means. Use the two year swap data to demonstrate your argument.

  Mature manufacturing firm

Antiques ‘R’ Us is a mature manufacturing firm. The company just paid a dividend of $11.00, but management expects to reduce the payout by 4.75 percent per year, indefinitely. If you require a return of 10 percent on this stock, what will you pay for..

  Bankruptcy legislation and wage-earner plan

Jon Morgan is in a financial position where he owes more than he earns each month. Calculate the monthly debt repayment amount.

  What is the after-tax cost of debt and cost of capital

What is the after-tax cost of debt? What is the cost of equity? What is the company's cost of capital (WACC)?

  The intrinsic value of equity is unknowable

The intrinsic value of equity is unknowable if the stock does not pay dividends.

  Purchase of common stock whose historical beta

You are considering the purchase of a common stock whose historical beta is .5. What rate of return should you require from this stock if the current risk free rate of return is 4% and the expected return on an average investment in the market is 11%..

  Capital budgeting criteria-ethical considerations

An electric utility is considering a new power plant in northern Arizona. Calculate the NPV and IRR without mitigation.

  Metronic under the current payout policy

What is the sustainable growth rate of Metronic under the current payout policy?

  Same time improving quality and patient experience

Health care organizations are facing tremendous pressure from payers and consumers to reduce costs while at same time improving quality and patient experience.

  True regarding a grantor retained annuity trust

Which of the following is true regarding a Grantor Retained Annuity Trust (GRAT)? provide explanation

  What is the interest rate on the debt

Assuming there are no taxes and Hubbard's debt is risk-free, what is the interest rate on the debt?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd