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A $1,000 par convertible debenture has a conversion price for common stock of $42 per share....
Maple Aircraft has issued a convertible subordinated debenture at 4.75% interest due 2020. The conversion price...
Maple Aircraft has issued a convertible subordinated debenture at 4.75% interest due 2020. The conversion price is $65.00 and the debenture is callable at 102.75% of face value. The market price of the convertible is 89.00% of face value, and the price of the common is $59.50. Assume that the value of the bond in the absence of a conversion feature is about 63.00% of face value. Assume a face value of $1,000. 1. What is the conversion value as...
The following facts apply to a convertible bond making semiannual payments: Conversion price $ 52...
The following facts apply to a convertible bond making semiannual payments: Conversion price $ 52 /share Coupon rate 6.6 % Par value $ 1,000 Yield on nonconvertible debentures of same quality 7 % Maturity 20 years Market price of stock $ 51 /share What is the minimum price at which the convertible should sell? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Minimum price $
Conversion price Calculate the conversion price for each of the following convertible bonds: a. A $1,000-par-value...
Conversion price Calculate the conversion price for each of the following convertible bonds: a. A $1,000-par-value bond that is convertible into 40 shares of common stock. b. A$1000-par-value bond that is convertible into 25 shares of common stock. c. A $1,000-par-value bond that is convertible into 125 shares of common stock. a. The conversion price is $ per share. (Round to the nearest cent.)
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...
You have been hired to value a new 30-year callable, convertible bond, with a $1,000 par...
You have been hired to value a new 30-year callable, convertible bond, with a $1,000 par value. The bond has a coupon rate of 5.3 percent, payable annually. The conversion price is $99, and the stock currently sells for $38.40. The stock price is expected to grow at 10 percent per year. The bond is callable at $1,200, but, based on prior experience, it won’t be called unless the conversion value is $1,300. The required return on this bond is...
The Olsen Mining Company has been very successful in the last five years. Its $1,000 par...
The Olsen Mining Company has been very successful in the last five years. Its $1,000 par value convertible bonds have a conversion ratio of 31. The bonds have a quoted interest rate of 5 percent a year. The firm’s common stock is currently selling for $41.20 per share. The current bond price has a conversion premium of $10 over the conversion value. a. What is the current price of the bond? (Do not round intermediate calculations and round your final...
Net income for the year $1,210,000 7% convertible bonds issued at par ($1,000 per bond); each...
Net income for the year $1,210,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,970,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,200,000 Common stock, $10 par value 5,820,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during 2021 in the number of common shares, preferred shares, or...
Vernon Glass Company has $20 million in 10 percent, $1,000 par value convertible bonds outstanding. The...
Vernon Glass Company has $20 million in 10 percent, $1,000 par value convertible bonds outstanding. The conversion ratio is 60, the stock price is $16, and the bond matures in 20 years. The bonds are currently selling at a conversion premium of $40 over their conversion value. If the price of the common stock rises to $22 on this date next year, what would your rate of return be if you bought a convertible bond today and sold it in...
Pittsburgh Steel Company has a convertible bond outstanding, trading in the marketplace at $870. The par...
Pittsburgh Steel Company has a convertible bond outstanding, trading in the marketplace at $870. The par value is $1,000, the coupon rate is 8 percent, and the bond matures in 25 years. The conversion price is $60 and the company’s common stock is selling for $52 per share. Interest is paid semiannually. If the interest rate on similar bonds that are not convertible are currently yielding 12 percent, what will be the pure bond value of the Pittsburgh Steel Company...
Conversion (or stock) value What is the conversion (or stock) value of each of the following...
Conversion (or stock) value What is the conversion (or stock) value of each of the following convertible bonds? a. A $1,000-par-value bond that is convertible into 25 shares of common stock. The common stock is currently selling for $50.00 per share. b. A$1,000-par-value bond that is convertible into 12.5 shares of common stock. The common stock is currently selling for $42.00 per share. c. A$1,000-par-value bond that is convertible into 100 shares of common stock. The common stock is currently...
Conversion price Calculate the conversion price for each of the following convertible bonds: a. A $1,000-par-value bond that is convertible into 40 shares of common stock. b. A$1000-par-value bond that is convertible into 25 shares of common stock. c. A $1,000-par-value bond that is convertible into 125 shares of common stock. a. The conversion price is $ per share. (Round to the nearest cent.)
Conversion (or stock) value What is the conversion (or stock) value of each of the following convertible bonds? a. A $1,000-par-value bond that is convertible into 25 shares of common stock. The common stock is currently selling for $50.00 per share. b. A$1,000-par-value bond that is convertible into 12.5 shares of common stock. The common stock is currently selling for $42.00 per share. c. A$1,000-par-value bond that is convertible into 100 shares of common stock. The common stock is currently...
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