A convertible bond has the following features Coupon 5 25 Maturity June 15, 2027 Market price of bond $77 50 Market price of underlying common stock $28 00 Annual dividend $1 20 Conversion ratio 20 83 shares Calculate the conversion premium for this bond ...

Market Price of underlying common sto ...

A convertible bond has the following features: Coupon ................. 5.25% Maturity .................. June 15, 2027 Market price

Question:

A convertible bond has the following features:

Coupon ................. 5.25%
Maturity .................. June 15, 2027
Market price of bond ............. $77.50
Market price of underlying ............ $28.00
Annual ........... ... $1.20
Conversion ratio ........... ... 20.83 shares

Calculate the conversion premium for this bond.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...