User Account

All Pages

Why a bond can sell above the conversion value

Assignment Help Financial Accounting
Reference no: EM132899851

NBC software Co has $10 million (face value) of convertibles bonds outstanding at the end of 2012. The features of each bond together with the current stock price are shown on the table below.

Bond face value                             $1000
Conversion Price                              $20
Current call price                              110 (percent of face value)
Current trading price                          125 (percent of face value)
Maturity                                            2020
Current share price of NBC software Co    $30 (per share)
Annual coupon rate (interest rate)            10%

Problem a) Calculate the bond's conversion value.

Problem b) why a bond's can sell above the conversion value

Problem c) Discuss the relative merits of discounted cash flows methods (DCF) over non DCF methods.

Reference no: EM132899851

Questions Cloud

Prepare the partial balance sheet of marconi on december : Prepare the partial Balance Sheet of Marconi on December 31, Year 3, that shows the presentation of the receivable and the accounts associated
How much is realized gross profit recognized in year of sale : Garden Co. accepts old merchandise as down payment and gives the customer a trade-in value.How much is the realized gross profit recognized in the year of sale?
Discuss the sarbanes-oxley act : Discuss the Sarbanes-Oxley Act. What effect has it had on companies' auditing processes? In what was has this affect been a positive one?
What is the highest price are willing to pay for a share : What is the highest price you are willing to pay for a share of IBM's common stock? What does the (Constant) Dividend discount model tell you? Discuss.
Why a bond can sell above the conversion value : Discuss the relative merits of discounted cash flows methods (DCF) over non DCF methods. why a bond's can sell above the conversion value
How much free trade credit does gfb co receive : Net purchases amount to P730,000 per year. On average, how much "free" trade credit does GFB Co. receive during the year? (Assume a 365-day year.)
What is the nominal annual cost of not taking the discount : What is the effective annual cost of not taking this discount? (Assume a 365-day year.). The firm does not take the discount, and it pays after 50 days.
Describe issue of standing in plain terms : Describe the issue of "standing" in plain terms. What is standing in the context of litigation? How does a party demonstrate standing?
BSBPMG534 Manage project human resources Assignment : BSBPMG534 Manage project human resources Assignment Help and Solution, Greenwich Management College - Assessment Writing Service

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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