What is the conversion ratio-what is the conversion value

Assignment Help Financial Management
Reference no: EM131872648

A convertible bond has a face value of $1,000 and the conversion price is $40 per share. The stock is selling at $30 per share. The bond pays $65 per year in interest and is selling in the market for $950. It matures in 7 years. Market rates are 10% annually. (I) What is the conversion ratio? (II) What is the conversion value?

Reference no: EM131872648

Questions Cloud

What is computer crime : What is computer crime? What are examples of this type of crime? Provide a short description of one of the early cases of computer crime.
Create a primary key for the returnstable : Create a primary key for the RETURNStable and create a foreign key on RETURNStable that references the ORDERS tables.
What is vanessa tax basis in cook inc after formation : The land was encumbered by a $30,000 mortgage executed two years before. What is Vanessa's tax basis in Cook, Inc. after formation
Explian what is the confidence level and margin of error : Explian what is the confidence level and margin of error? Why do you feel the article would include the standard error and error of margin?
What is the conversion ratio-what is the conversion value : Market rates are 10% annually. (I) What is the conversion ratio? (II) What is the conversion value?
Mean for the american system of criminal justice : What would it mean for the American system of criminal justice, if stare decisis actually was an "inexorable command" or a "mechanical formula
Identify the appropriate software tools needed for project : Explain how you would identify the appropriate software tools needed for a project. What aspect would you need to take into consideration before making.
How did the federal courts develop historically : 1) How did the federal courts develop historically? 2) What have been the recent developments in state courts?
Calculate any passive investment income tax penalty : It reports $58,000 of taxable income and AMT adjustments of of $17,000 for the year. Calculate any passive investment income tax penalty

Reviews

Write a Review

Financial Management Questions & Answers

  What is the effective annual yield

PK Software has 8 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 109.25 percent of par. What is the effective annual yield?

  After-tax value-working capital recovered

The president of Lowell Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer’s price is $60,000, and it falls into the MACRS 3-year class (33% in year 1, 45% in year 2, 15% in year 3, and 7% in year 4). What is the ..

  Is it better off selling this loan without recourse

what does it expect to receive if the loan is sold with recourse? Is it better off selling this loan without recourse? Why?

  Considering investment in third world bank account

You are considering an investment in a Third World bank account that pays a nominal annual rate of 18%, compounded monthly.

  Complete the table with the correct postp-merger figures

The following table show pre-merger figures of CH Enterprises and ComYon Corporation: CH Enterprises (Pre-Merger) ComYon Corp.(Pre-Merger) CH Enterprises (Post-Merger) 1) EPS $2.00 $2.00 ? 2) Price per Share $40 $20 ? 3) P/E Ratio 20 10 ? 4) # of Sha..

  What is the current total value

Beach & Company reported net income of $40 million for last year. Depreciation expense totaled $18 million and capital expenditures came to $8 million. Free cash flow is expected to grow at a rate of 5% for the foreseeable future. What is the current..

  What must expected return on the market be

A stock has an expected return of 11.3 percent, its beta is .88, and the risk-free rate is 5.65 percent. What must the expected return on the market be?

  How do you think sweeps have affected m2

Given Figure shows that sweep programs have reduced the level of M1. - How do you think sweeps have affected M2?

  Swap a fixed rate vs. a short rate

(Swap a fixed rate vs. a short rate) Consider the following version of an interest rate swap.

  Project the effective gross income for next five years

An office building has three floors of rentable space with a single tenant on each floor. The first floor has 20,000 square feet of rentable space and is currently renting for $15 per square foot. Three years remain on the lease. The lease has an exp..

  What is percentage price change

If the required yield drops to 6% (instantaneously, so the maturity does not change), what is the percentage price change?

  What is the present value of the maintenance costs

You are thinking of making an investment in a new factory. what is the present value of the maintenance costs?

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!

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