Market price of convertible bonds 100 norminal value of 8% convertible bonds can be converted in four years to 25 shares or redeemed at a premium of 15%. Training The current share price is 4.75 and dividends are expected to grow at 3% pa. What is the value of 100 norminal of the convertible if bond holders require a return of 8% pa?
Market price of convertible bonds 100 norminal value of 8% convertible bonds can be converted in four years to 25 shares or redeemed at a premium of 15%. Training The current share price is 4.75 and dividends are expected to grow at 3% pa. What is the value of 100 norminal of the convertible if bond holders require a return of 8% pa?
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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Market price of convertible bonds 100 norminal value of 8% convertible bonds can be converted in four years to 25 shares or redeemed at a premium of 15%.
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The current share price is 4.75 and dividends are expected to grow at 3% pa. What is the value of 100 norminal of the convertible if bond holders require a return of 8% pa?
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