Why did convertible bonds perform poorly in 2008

Assignment Help Finance Basics
Reference no: EM133204761

Why did convertible bonds perform poorly in 2008 and then perform very well in 2009? 

B) Why did convertible arbitrage strategies do poorly in 2008?

C) We have the following information: 

Conversion ratio= 50

Current stock price is 16 dollars per share.

Convertible bond is currently trading at 1000.

Coupon on the convertible bond is 6.0%.

Straight value of bond= 800

Calculate the conversion value, value of the option embedded in the convertible bond, and the market conversion price.

Reference no: EM133204761

Questions Cloud

Reverse mortgage and a homeowner line of credit : 1. As concisely as possible, please explain the difference between a reverse mortgage and a homeowner line of credit.
Examine the costs of production for your firm : Examine the costs of production for your firm. Analyze the various costs a firm faces, their trends over time, and how they have impacted firm's profitability
Write a reply to the discussion : Write a reply to the following discussion: Severe Acute Respiratory Syndrome was a disease that appeared in China around 2002.
Explain why they were chosen as interviewers : Select a panel of interviewers who will interview these two candidates. Explain why they were chosen as interviewers?
Why did convertible bonds perform poorly in 2008 : Why did convertible bonds perform poorly in 2008 and then perform very well in 2009?
Explain the reasoning behind your recommendation : What model would you recommend to her. Write a letter to her explaining the reasoning behind your recommendation.
Who would you report ethical issues to : Who would you report ethical issues to? While on work placement, discuss with your work place supervisor the industry relevant documentation that you have used
Discuss the evolution of the securities markets : Discuss the evolution of the securities markets, including the impact of the NASDAQ, CME, ECNs, and foreign exchanges.
Bce common shares-bce preferred shares : Jamie Lee's father, on the other hand, suggested that they purchase BCE preferred shares instead. Jamie Lee's father has held BCE preferred shares for decades.

Reviews

Write a Review

Finance Basics Questions & Answers

  What factors will influence brad''s asset allocation

Given Brad's lack of knowledge of investing and his limited time to learn or do research, what might be the best option for Brad to pursue and still get the benefit of the potential growth in the technology sector?

  What is the cost of capital for jones distributing

What is the cost of capital for Jones Distributing if the corporation raises money by selling common stock? 27.00% 18.89% 18.33% 17.00% I am getting18.33. but I think its 18.39?

  Determine the number of cash cycles or turnover in one year

The following information is provided for an annual period: Average Inventory Balance: 245,000 Sales for the year: 1,600,000 Average Receivable Balance: 175,000

  What are the advantages of having formed the company

What are the advantages of having formed the company as a corporation? What other organizational structures would have been appropriate? Could Interact Systems qualify for S corporation status with the IRS? Why or why not?

  Compare and contrast three types of observation

Compare and contrast three types of observation, identifying the advantages and disadvantages of each.- Most descriptive research designs gather information from a group of participants.

  Assume that you are in a game show there are 4 prizes

imagine you are in a game show. there are 4 prizes hidden on a game board with 16 spaces. one prize is worth 4000

  What is finance explain how this field affects the life

What is finance? Explain how this field affects the life of everyone and of every organization.

  Current and noncurrent asset or liability

What differentiates a current asset or liability from a noncurrent asset or liability? Explain what effect the payment of dividends has on net worth?

  Research and then design a laboratory

Research and then design a laboratory set-up that would enable you to separate a mixture of three hydrocarbons with different boiling points.

  Evaluate the result and process from three perspectives

When you have implemented continuous improvement activity, you should evaluate the result and process from three perspectives, Customer, Company, You

  Calculate what mrfi stock price

Based on the forecasted dividend stream, calculate what MRFI's stock price should be 13 years from now, instantaneously after Div13 is paid.

  Possible investment projects in the future

What major factors should a company (specifically coca cola) be aware of as it evaluates possible investment projects in the future?

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