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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Question
A4)

Transcribed Image Text:The SXX Corporation offers to exchange $42 1/2 million of a $75 1/2 million, 4 1/2% bond of 2029 which is currently quoted at 55 and is convertible to 25 shares of
common, for a 4 1/2% nonconvertible of 2029, plus some cash. The common stock pays $1.60 per share and is selling at 20.75. The current yield on the bond is:
O 4.3%.
O 4.25%.
O 8.18%.
O 20.5%.
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