A 4% annual coupon convertible bond has 14 years to maturity, a $ 1,000 par value and is priced at $ 1,620. This bond can be converted into 20 shares of common. The common currently sells for $63 per share and pays a $0.20 quarterly dividend per share. Similar bonds that are not callable yield 5.25%. What is this bonds investment value? $926.76 $998.07 $878.22 $ 843.12
A 4% annual coupon convertible bond has 14 years to maturity, a $ 1,000 par value and is priced at $ 1,620. This bond can be converted into 20 shares of common. The common currently sells for $63 per share and pays a $0.20 quarterly dividend per share. Similar bonds that are not callable yield 5.25%. What is this bonds investment value? $926.76 $998.07 $878.22 $ 843.12
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A 4% annual coupon convertible bond has 14 years to maturity, a $ 1,000 par value and is priced at $ 1,620. This bond can be converted into 20 shares of common. The common currently sells for $63 per share and pays a $0.20 quarterly dividend per share. Similar bonds that are not callable yield 5.25%. What is this bonds investment value? $926.76 $998.07 $878.22 $ 843.12
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