StormTech has S1,000 convertible bonds with a coupon rate of 10% paid annually, that has 10 years to maturity. The bond is convertible into 30 shares of StormTech. The current interest rate on similar bonds without the convertible option is 7.3%. The current stock price of StormTech is $45. a What is the bond's straight-debt value? 5 What is StomTech bond's conversion value? S

StormTech has S1,000 convertible bonds with a coupon rate of 10% paid annually, that has 10 years to maturity. The bond is convertible into 30 shares of StormTech. The current interest rate on similar bonds without the convertible option is 7.3%. The current stock price of StormTech is $45. a What is the bond's straight-debt value? 5 What is StomTech bond's conversion value? S

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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Similar questions

Nesmith Corporation's outstanding bonds have a $1,000 par value, an 8% semiannual coupon, 10 years to maturity, and an 11% YTM. What is the bond's price? Round your answer to the nearest cent. $ ___________
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