Bjrn is considering investing DKK800 in Danske Bank A/S shares. He can buy common stock at DKK160
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Bjørn is considering investing DKK800 in Danske Bank A/S shares. He can buy common stock at DKK160 per share, and the stock pays no dividends. He can also buy a convertible bond (DKK1,000 par value) that is currently trading at DKK790 and has a conversion ratio of four. It pays DKK50 per year in interest. If Bjørn expects the price of the stock to rise to DKK200 per share in one year, which instrument should he purchase?
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Calculations Stock price in one year DKK200 Nu...View the full answer
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Labindao Antoque
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ISBN: 9780135175217
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Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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