Why did convertible bonds perform poorly in 2008 and then perform very well in 2009? Why did
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Question:
Why did convertible bonds perform poorly in 2008 and then perform very well in 2009?
Why did convertible arbitrage strategies do poorly in 2008?
We have the following information:
Conversion ratio= 50
Current stock price is 16 dollars per share.
Convertible bond is currently trading at 1000.
Coupon on the convertible bond is 6.0%.
Straight value of bond= 800
Calculate the conversion value, value of the option embedded in the convertible bond, and the market conversion price.
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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