Horizon Industries issued a $1,200 bond at par. The common stock has a market price of $50. The conversion price is $60. Into how many shares can the bond be converted?
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- What happens in the case of a bond selling for $1,000 that can be converted to 20 shares of stock that are currently selling for $80 per share?A convertible bond has a par value of $1,000, but its current market price is at $975. The current price of the issuing company's stock is $26, and the conversion ratio is 34 shares. What is the bond's market conversion value?Assume that Almond Milk Company has a $1,000 face value bond with a stated coupon rate of 8.18 percent that is convertible into its common stock at $35.77. The bond is selling at $1,096.27 in the market. The common stock is selling for $33.84 and pays a dividend of 0.62 per share. Calculate the payback premium period.
- Not use aiYou bought a convertible bond issued by Zip Corp which has a conversion ratio of 50 common shares for each $1,000 bond. A) At what stock price per share would you make a profit (“in the money”) if you bought the bond at par? B) What would you expect the bond to sell for in the market if Zip Corp’s stock trades at $28.50 per share?A bond is convertible into 35 shares of common stock. If the bond trades at 80, what is the parity price of the stock?
- A convertible bond has a par value of $1,000 and a conversion priceof $25. The stock currently trades for $22 a share. What are thebond’s conversion ratio and conversion value at t= 0? (40, $880)You own 100 convertible bonds issued by Eagles, Inc. You bought it when the company's stock traded at $35/share. It is convertible at a price of $40 per share. Eagles is performing very well and the stock now trades at $85 per share. You decide to convert your bonds into common shares. Remember that each bond has a par value of $1,000. At the current market value, what are your shares worth? Use $ symbol and commas if appropriate. Round to the nearest $.A convertible bond can be converted into 1 share of stock. The bond is zero-coupon, i.e., it pays no interest, but matures to a value of $100 in two periods. The stock price is currently $100. In each period the stock can increase in each period by a factor of 1.4, or fall by a factor of 0.8. Each period the stock pays a dividend of 5%, at which point it can be converted. The risk-free rate is 10% and time to maturity is 2-years. Find the price at which the convertible bond can be issued