Lummer plc has issued 60m 15-year 8.5 per cent coupon bonds with a par value of 100.

Question:

Lummer plc has issued £60m 15-year 8.5 per cent bonds with a of £100. Each bond is convertible into 40 shares of Lummer ordinary shares, which are currently trading at £1.90.
a. What is the conversion price?
b. What is the conversion premium?
c. What is the conversion value of the bond?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...