1. Special Venture Co. 10-year convertible bond pays a 6% semi-annual coupon (face value is $1000). The yield to maturity is 10% on debt of this quality. Surrendering the bond under the conversion terms allows the bondholder to receive 50 shares of stock. What is the market value of the convertible bond if the stock trades at $21 per share?

Answer rating: 100% (QA)

Heres how to calculate the market value of the convertible bond 1 Intrinsic Value This represen... View the full answer