A certain 6% annual coupon rate convertible bond (maturing in 20 years) is convertible at the...
A certain 6% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holder's option into 20 shares of common stock. The bond is currently trading at $800. The stock (which pays 58¢ a share in annual dividends) is currently priced in the market at $30.61 a share.
a. What is the bond's conversion price?
b. What is its conversion ratio?
c. What is the conversion value of this issue? What is its conversion parity?
d. What is the conversion premium, in dollars and as a percentage?
e. What is the bond's payback period?
f. If comparably rated, nonconvertible bonds sell to yield 8 % comma what is the investment value of the convertible?
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A certain 6% annual coupon rate convertible bond (maturing in
20 years) is convertible at the...
A certain 6% annual coupon rate convertible bond (maturing in 20 years) is convertible at the...
A certain 6% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holders option into 20 shares of common stock. The bond is currently trading at $800. the stock (which pays .71 a share in annual dividens) is currently priced in tje market at $29.78 a share. a) what is the bonds conversion price b) what is the conversion ratio c) what is the conversion value & parity d) what is the conversion permium in dollars...
A certain 5% annual coupon rate convertible bond (maturing in 20 years) is convertible at the...
A certain 5% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holder's option into 17 shares of common stock. The bond is currently trading at $790. The stock(which pays 56¢ a share in annual dividends) is currently priced in the market at $33.79 a share. QUESTIONS: HUGE THUMBS UP FOR CORRECT ANSWERS c. The conversion value of this issue is (blank) $ ? (Round to the nearest cent.) d.. The conversion premium in dollars is...
4. [14 Points] You have been hired to value a new 20-year convertible bond. The bond...
4. [14 Points] You have been hired to value a new 20-year convertible bond. The bond has a coupon rate of 3%, payable semiannually, and its face value if $1,000. The conversion price is $50, and the stock currently sells for $38. a. What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4% b. What is the conversion premium for this bond?
A convertible bond is selling for $967, matures in 15 years, has a $1,000 face value,...
A convertible bond is selling for $967, matures in 15 years, has a $1,000 face value, pays interest semiannually, and has a coupon rate of 8 percent. Similar non-convertible bonds are priced to yield 4.25 percent per six months. The conversion ratio is 20. The stock currently sells for $47.50 a share. Calculate the convertible bond's option value.
A convertible bond has a coupon of 7 percent, paid semiannually, and will mature in 20...
A convertible bond has a coupon of 7 percent, paid semiannually, and will mature in 20 years. If the bond were not convertible, it would be priced to yield 6 percent. The conversion ratio on the bond is 15 and the stock is currently selling for $54 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid...
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid semiannually, and will mature in 10 years. If the bond were not convertible, it would be priced to yield 6.5 percent. The conversion ratio on the bond is 30 and the stock is currently selling for $52 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid...
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid semiannually, and will mature in 10 years. If the bond were not convertible, it would be priced to yield 6.5 percent. The conversion ratio on the bond is 30 and the stock is currently selling for $52 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Standard Olive Company of California has a convertible bond outstanding with a coupon rate of 10...
Standard Olive Company of California has a convertible bond outstanding with a coupon rate of 10 percent and a maturity date of 15 years. It is rated Aa, and competitive, nonconvertible bonds of the same risk class carry a 14 percent return. The conversion ratio is 25. Currently the common stock is selling for $35 per share on the New York Stock Exchange. a. What is the conversion price? (Round your answer to 2 decimal places.) b. What is the...
Standard Olive Company of California has a $1,000 par value convertible bond outstanding with a coupon...
Standard Olive Company of California has a $1,000 par value convertible bond outstanding with a coupon rate of 8 percent and a maturity date of 20 years. It is rated Aa, and competitive, nonconvertible bonds of the same risk class carry a 22 percent yield. The conversion ratio is 20. Currently the common stock is selling for $30 per share on the New York Stock Exchange. a. What is the conversion price? (Round your answer to 2 decimal places.) Conversion...
Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are...
Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below. Convertible Bond Characteristics Par value $1,000 Annual coupon rate (annual pay) 7.68 Conversion ratio 30 Market price 1218 of par Straight value 998 of par Underlying Stock Characteristics Current market price $ 32 per share ences Compute the bond's conversion value and conversion price. (Round your conversion price to 2 decimal places.) Conversion value Conversion price
4. [14 Points] You have been hired to value a new 20-year convertible bond. The bond has a coupon rate of 3%, payable semiannually, and its face value if $1,000. The conversion price is $50, and the stock currently sells for $38. a. What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4% b. What is the conversion premium for this bond?
A convertible bond has a coupon of 7 percent, paid semiannually, and will mature in 20 years. If the bond were not convertible, it would be priced to yield 6 percent. The conversion ratio on the bond is 15 and the stock is currently selling for $54 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid semiannually, and will mature in 10 years. If the bond were not convertible, it would be priced to yield 6.5 percent. The conversion ratio on the bond is 30 and the stock is currently selling for $52 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Problem 18-6 Convertible Bonds (LO3, CFA5) A convertible bond has a coupon of 7.5 percent, paid semiannually, and will mature in 10 years. If the bond were not convertible, it would be priced to yield 6.5 percent. The conversion ratio on the bond is 30 and the stock is currently selling for $52 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum value
Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below. Convertible Bond Characteristics Par value $1,000 Annual coupon rate (annual pay) 7.68 Conversion ratio 30 Market price 1218 of par Straight value 998 of par Underlying Stock Characteristics Current market price $ 32 per share ences Compute the bond's conversion value and conversion price. (Round your conversion price to 2 decimal places.) Conversion value Conversion price
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