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!
Convertible bonds are the debt instruments issued which can be converted after a pre-specified date for a pre-specified number of securities (generally equity stock). It is necessary that all other relevant inform about the conversion of the bonds should be clearly given in the offer document of the convertible bond.
Investor has the choice to convert or not convert the bonds into stocks. If he chooses not to convert the bonds into stock then he will keep receiving interest payments from the company. In the other case, he will get a specific number of equity shares of the company. Since the investor is getting the conversion privilege, he/she will accept a lower coupon rate for a convertible bond compared with an otherwise identical non-convertible bond (i.e., a non-convertible bond with same credit rating, the same term to maturity, etc.). Thus, we can conclude that convertible bonds may have a lower cost of capital in comparison to non-convertible bonds with same caracteristics. It may be possible that when conversion of bonds becomes due the conversion price is lower than the market price of the share. In such a scenario the company will loose what it earned because of lower cost of capital. Therefore, it is very necessary that the company should set the conversion price very carefully.
1) According to the IFE (RIP), if U.S. investors expect a 3% rate of domestic inflation over one year, and a 6% rate of inflation in European countries that use the EUR, and requir
Robert Litterman and Jose Scheinkman were the first to study how changes in the shapes of the yield curve affect the total return on the Treasury securities. The histor
Financial statement analysis report: 1. Perform a comparative analysis (horizontal analysis). Analyze two items on the balance sheet and two items on the income statement for
Why does a tax create a deadweight loss? What determines the size of this loss? A tax makes deadweight loss by artificially increasing price above the free market level, so de
Q. What is denoted by weighted average cost of capital OR Composite? How is it calculated? Exemplify with an example. Ans. Weighted Average Cost of Capital: - Capital formation
What are the Material items are carried out Material items would have an impact on: Audit tests carried out. For illustration compliance based testing (relying on contro
Q. Cost of Equity Share Capital? Cost of Equity Share Capital: - The cost of equity is the utmost rate of return that the company should earn on equity financed position of its
What are the primary variables being balanced in the EOQ (Economic Order Quantity) inventory model? Explain The primary variables being balanced in the EOQ (Economic Order Quant
Debt holders versus Shareholders A second agency problem arises because of potential conflict between stockholders and creditors. Creditors lend finances to the firm at rates w
exercise
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd