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Banana Computer has a perpetual, convertible 7% annual coupon bond outstanding. The bond has a face value of $1,000 and has a conversion price of $40. The required return on an otherwise identical nonconvertible bond is 8%. Banana will never pay dividends and its current stock price is $20.
a. What is the straight value of the convertible bond?
b. What is its conversion value?
c. If Banana's stock price were to grow at 10% per year forever, how long would it take for the bond's conversion value to exceed the bond price?
d. When should the bondholder convert? Why?
On May 15, 2010, Your Corporation acquired an airplane (5 year recovery period, 6 year class life) for $1,450,000. Its qualified business use is 54%. Determine the maximum cost rec
Question: (a) ‘Public accounting is often called fund accounting'. Describe what you understand by the term ‘fund accounting'. (b) "What's the difference between nation
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effects of public debt on production, d
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