Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
We defined the conversion premium as the difference between the market price of the convertible and the conversion value. The conversion premium ratio tells us about the magnitude of appreciation in the price that the stock should experience so that a parity price relationship is reached between the convertible bond and the underlying share. Expressed in another way, the profit/loss, if an investor buys a convertible bond, exercises it and sells the equity shares, his position should not change. That is a situation wherein the investor does not experience either profit or loss. This situation is referred to as conversion parity price relationship. The amount of appreciation that the common stock would undergo is also given by,
For the above example, this will be,
117/10 = Rs.11.70.
This ratio indicates that the price should rise by about Rs.0.70 (6.36% of 11), so that parity is reached.
In no circumstances will the market price of the convertible be lower than the conversion price because the investors may make risk-free profits through arbitrage.
Q. Major proportion of the maximum financing requirement? Whether the credit terms themselves is able to be changed may depend upon the credit terms of competitors when set alo
Accounting Rate of Return (ARR): This technique relies on the rate of return every project will earn over its life. It takes the help of accounting profit while calculating the
Q. Describes Net Income Approach to Capital Structure? Net Income Approach: - As-per to the Net Income Approach as suggested by Durand the capital structure decision is applica
a) Year 2 Year 1 Stock turnover (350/500) * 365 = 255.5 days (250/450) * 365 = 202.7 days
Ask I have included a simple capital investment problem which is in Course Documents. We are going to use the same numbers for several classes and look at some of the ways that cap
Benjamin Tang currently has holdings in the following three companies: E(R) σ
What is the difference between business risk and financial risk? Business risk considers to the uncertainty a company has regarding to its operating income (as well termed as ear
In a floating rate security, the coupon rate changes periodically as per the reference rate. The yield to maturity of floating rate securities cannot be calculated as
A futures contract is a contract to purchase (and sell) a particular asset at a fixed price in a future time period. There are two parties for every futures contract - the seller o
what are the characteristics of relative cost
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd