If a convertible bond has a conversion ratio of 25, a face value of $1,000, a coupon rate of 7%, and the market price of the company's stock is $40 per share, what is the convertible bond's conversion value?
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- Calculate the market conversion price for a convertible bond with par value of $4000, coupon rate of 5%, market price of $4000, a conversion ratio of 16, and current stock price of $202. 1. Assuming, the issuing company pays an annual dividend of $12 per share, what is the favorable income differential (yield advantage) per share for this bond? 2. Calculate the premium payback period for this bond.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)A certain convertible bond has a conversion ratio of 30 and a conversion premium of 15%. The current market price of the underlying common stock is $30. What is the bond's conversion equivalent?SaThe bond's conversion equivalent is $(Round to the nearest cent.)
- A bond has a face value of $100 and a conversion ratio of 25. What is a good time to convert to equity for bond holders given the following stock price? A) $0.3 B) $3 C) $5 D) $4A$1,000 face value convertible bond has a conversion ratio of 31 and is about to mature. Ignoring any transaction costs, what price must the stock surpass in order for you to convert? The required price per share will be $ (Round to the nearest cent.)Consider a convertible bond as follows: par value: $1,000.00 coupon rate: 5.00% market price of the convertible bond: $950.00 conversion ratio: 22 yield to maturity of straight bond: 10.00% stock price: $30.00 DPS: $1.00 If the premium over straight value is 12.5%, what is the straight value of the bond?
- A bond has a conversion price of $12 and a face value of $2,000. The conversion ratio is ?Consider a convertible bond trading at $1,000 with a conversion ratio of 37.383, coupon rate of 9.5%, and par value of $1,000. If the firm's stock trades at $23 and provides an annual dividend of $0.75, what is the premium payback period? 1.81 1.99 2.23 2.09Given the following information concerning a convertible bond: Principle: $1,000 Coupons: 5 percent Maturity: 15 years Call Price: $1,050 Conversion price: $37 (i.e., 27 shares) Market Price of the Bond: $1040 Common stock: $30 G. What is the probability that the corporation will call this bond? H. Why are investors willing to pay the premiums mentioned in questions d and f? (D, What is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? F,What is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond?) (dont need D and F answers only G. and H. need help with please dont put in excel i dontunderstand that stuff yet equations and worded answers please)
- Assume that the risk-free rate (i.e., Rf) is 2.8%. If, for a particular company bond issue, the default risk premium (i.e., DP) is 3.1%, the maturity risk premium ( i.e., MP) is 0.9%, and the market risk premium ( i.e., MRP) for that company's stock is 12.9% what is the required rate of return for the company's fixed income securities ? Record your answer as a percent , rounded to one decimal place , but do not include a percent sign in your answer . For example , enter 0.1578658 = 15.78625% as 15.8 .Given the following information concerning a convertible bond: Coupon: 6 percent ($60 per $1,000 bond) Exercise Price: $25 Maturity date: 20 years Call Price: $1040 Price of the common stock: $30 If the bond were not convertible, what would be its approximate value if comparable interest rates were 9 percent? How many shares can the bond be converted into? What is the value of the bond in terms of stock? What is the current minimum price that the bond will command? Is there any reason to anticipate that the firm will call the bond? What do investors receive if they do not convert the bond when it is called? If the bond were called, would it be advantageous to convert?The following facts are available about a convertible bond: Market Price of issuer's common stock = S = 100, uS = 110, dS = 90, Interest Rate = 3%, Face Value of a Convertible Bond (E) = 1,000. Using the One Period Binomial Model to create a replicating portfolio, calculate the price of this convertible bond. a. $1,001.67 b. $1,018.51 c. $1,033.98 d. $1,041.15 Do it correctly with step by step explanation.