A 10 per cent convertible bond can be converted in four years time into 25 ordinary shares
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A 10 per cent convertible bond can be converted in four years’ time into 25 ordinary shares or redeemed at nominal value of £100 on the same date. The return required on the bond is 11 per cent. The current ex dividend market price of the underlying share is £3.35, and this is expected to grow by 5 per cent per year.
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Conversion looks likely since a rational investor faced ...View the full answer
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Related Book For
Corporate Finance Principles And Practice
ISBN: 9781292450940
9th Edition
Authors: Denzil Watson, Antony Head
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