Reference no: EM133114474
Given the information below, answer the following questions.
A convertible bond has the following features:
Principal $1,000
Maturity date 25 years
Interest $80 (8% coupon)
Call price $1,060
Exercise price $55 a share
a. The bond may be converted into how many shares?
b. If comparable non-convertible debt offered an annual yield of 12 percent, what would be the value of this bond as debt?
c. If the stock were selling for $49.50, what is the value of the bond in terms of stock?
d. Would you expect the bond to sell for its value as debt (i.e., the value determined in b) if the price of the stock were $49.50? If not, what price should it at least sell for?
e. If the price of the bond were $960, what are the premiums paid over the bond's value as stock and its value as debt?
f. What is the probability that the bond will be called when the price of the stock is $49.50?
|
Determine brent federal tax payable for 2021
: Brent Wells is single and lives alone. During 2021 he earned employment income of $73,500. His employer withheld EI ($890) and CPP ($3,166) contributions of $4,
|
|
Explain the three budgeting methods
: Explain the three budgeting methods (Payback Period, NPV, IRR). Include details and examples so your investors can understand the advantages and disadvantages
|
|
How can you detect this earnings management activity
: Who will be affected by this proposed action and why? If you are the analyst of the company, how can you detect this earnings management activity
|
|
What is your break-even price
: What quantity of copiers sale would you want? What is your break-even price?
|
|
What is the value of the bond in terms of stock
: Given the information below, answer the following questions.
|
|
Determine the net pay of the ten employees during november
: Marigold Party Rental has 10 employees who earned a total of $31000 in November ($3100 each). Determine the net pay of the ten employees during November
|
|
Spreadsheet and calculation of projected cash flows
: Penn Printing is considering opening a new production facility near Erie, PA. In deciding whether to proceed with the project, the company has gathered the foll
|
|
Finding one unit of oil and gold
: Imagine two companies, Oil Inc. and Gold Inc., which invest in exploration activities. The probability of ?nding one unit of oil and gold, respectively, is the
|
|
Development of new antimicrobial drugs
: Discussing how known mechanisms of microbial resistance could affect the development of new antimicrobial drugs
|