Nick Andrews, a fixed-income investment analyst, has been asked by his supervisor to prepare an analysis of
Question:
Nick Andrews, a fixed-income investment analyst, has been asked by his supervisor to prepare an analysis of the convertible bond issued by Heavy Element Inc., a chemical industry company, for presentation to the investment committee. Andrews has gathered the following data from the convertible bond’s prospectus and market information:
Issuer: Heavy Element Inc.
Issue Date: 15 September 2020
Maturity Date: 15 September 2025
Interest: 3.75% payable annually
Issue Size: $100,000,000
Issue Price: $1,000 at par
Conversion Ratio: 23.26
Convertible Bond Price on 16 September 2022: $1,230
Share Price on 16 September 2022: $52
The conversion price is closest to:
A. $19.
B. $43.
C. $53.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
B is correct The conversion p...View the full answer
Answered By
Akshay Agarwal
I am a Post-Graduate with a specialization in Finance. I have been working in the Consulting industry for the past 8 years with a focus on the Corporate and Investment Banking domain. Additionally, I have been involved in supporting student across the globe in their academic assignments and always strive to provide high quality support in a timely manner. My notable achievements in the academic field includes serving more than 10,000 clients across geographies on various courses including Accountancy, Finance, Management among other subjects. I always strive to serve my clients in the best possible way ensuring high quality and well explained solutions, which ensures high grades for the students along-with ensuring complete understanding of the subject matter for them. Further, I also believe in making myself available to the students for any follow-ups and ensures complete support and cooperation throughout the project cycle. My passion in the academic field coupled with my educational qualification and industry experience has proved to be instrumental in my success and has helped me stand out of the rest. Looking forward to have a fruitful experience and a cordial working relationship.
179+ Reviews
294+ Question Solved
Related Book For 
Question Posted:
