. You own a convertible bond that pays annually, has a 4% yield, 7.5% coupon rate, and matures in 10 years. The conversion ratio is 20. The stock price is $43. What is your gain or loss if you convert? What is the minimum stock price to convert this bond? Answer: loss of 423.88 / convert if stock price is greater than 64.19

. You own a convertible bond that pays annually, has a 4% yield, 7.5% coupon rate, and matures in 10 years. The conversion ratio is 20. The stock price is $43. What is your gain or loss if you convert? What is the minimum stock price to convert this bond? Answer: loss of 423.88 / convert if stock price is greater than 64.19

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 8P

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Correct Answer
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