On 2 May 2024, Armand analyzes the convertible bond issued by ACC Inc., given in the...
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On 2 May 2024, Armand analyzes the convertible bond issued by ACC Inc., given in the following table. Issue Date: Maturity Date: 2 May 2022 2 May 2027 Coupon Rate: 3.5% Coupon Payment: Annual Issue Price: $1,000 Par value: $1,000 Conversion Ratio: 25 On the same day, relevant yield curve is flat 4% and ACC's stock price $46. 1) The price of the ACC's convertible bond on 2 May 2024 will not be lower than (Answer the price of one bond assuming the coupon on 2 May 2024 has already been paid. Keep two digits after the decimal points.) 2) If the actual market price of ACC's convertible bond is $1175, the market conversion premium ratio on 2 May 2024 is %. (Answer in percentage terms keeping two digits after the decimal, without the % sign.) On 2 May 2024, Armand analyzes the convertible bond issued by ACC Inc., given in the following table. Issue Date: Maturity Date: 2 May 2022 2 May 2027 Coupon Rate: 3.5% Coupon Payment: Annual Issue Price: $1,000 Par value: $1,000 Conversion Ratio: 25 On the same day, relevant yield curve is flat 4% and ACC's stock price $46. 1) The price of the ACC's convertible bond on 2 May 2024 will not be lower than (Answer the price of one bond assuming the coupon on 2 May 2024 has already been paid. Keep two digits after the decimal points.) 2) If the actual market price of ACC's convertible bond is $1175, the market conversion premium ratio on 2 May 2024 is %. (Answer in percentage terms keeping two digits after the decimal, without the % sign.)
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