Question: 1. Conversion Price A convertible bond with a par value of $1,000 has a conversion ratio of 16.4. What Page 759 is the conversion price?

1. Conversion Price A convertible bond with a par value of

1. Conversion Price A convertible bond with a par value of $1,000 has a conversion ratio of 16.4. What Page 759 is the conversion price? 2. Conversion Ratio A convertible bond with a par value of $1,000 has a conversion price of $42.18. What is the conversion ratio of the bond? 3. Conversion Premium Eckely, Inc., recently issued bonds with a conversion ratio of 13.8. If the stock price at the time of the bond issue was $49.12, what was the conversion premium? 4. Convertible Bonds Denise Home Products, Inc., recently issued $2 million worth of 3 percent convertible debentures. Each convertible bond has a face value of $1,000. Each convertible bond can be converted into 21.5 shares of common stock anytime before maturity. The stock price is $32.15 and the market value of each bond is $980. a. What is the conversion ratio? b. What is the conversion price? c. What is the conversion premium? d. What is the conversion value? e. If the stock price increases by $2, what is the new conversion value

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1. Consider a convertible bond as follows: par value = $1,000; coupon rate = 9.5% market price of convertible bond = $1,000 conversion ratio = 37.383 estimated straight value of bond = $510 yield to...

A certain convertible bond carries a par value of $1,000 and a conversion ratio of 25. If the issue is quoted at 148 while the stock trades at $56, the bond's conversion premium equals a. $93.50. b....

Problem 8 (5 points) A convertible bond has a par value of $1,000, but its current market price is $975. The current price of the issuing company's stock is $26, and the conversion ratio is 34...

Consider a convertible bond as follows: par value = $1,000; coupon rate = 9.5% market price of convertible bond = $1,000 conversion ratio = 37.383 estimated straight value of bond = $510 yield to...

A company just sold a convertible bond at a par value of $1,000. If the conversion price is $46, what is the conversion ratio? (Round your answer to 2 decimal places.) A company just sold a...

A(n) 8% convertible bond carries a par value of $1,000 and a conversion ratio of 20. Assume that an investor has $5,000 to invest and that the convertible sells at a price of $1,000 (which includes a...

A n 8% convertible bond carries a par value of $1,000 and a conversion ratio of 20. Assume that an investor has S5,000 to invest and hat the convertible sells at a price of S 1.000 which includes a...

A(n) 8% convertible bond carries a par value of $1,000 and a conversion ratio of 19. Assume that an investor has $5,000 to invest and that the convertible sells at a price of $1,000 (which includes a...

A convertible bond has a par value of $1,000, but its current market price is $1,025. The current price of the issuing company's stock is $19 per share, and the conversion ratio is 50 . The...

Fill out the Table 2 covers most of the concepts and research required for an informed and intelligent attempt at this task. The table is provided in Word format online. You can write as much in the...

Write solutions on a plain white paper, take picture and upload What is the differences between Price sticky and price flexibility.

1 . Describe the impact of a bonds coupon rate on its interest rate risk.

Your father LeBron paid $230,000 for an investment that promises to pay $4,500 at the end of each of the next 5 years, then an additional lump sum payment of $25,500 at the end of the 6th year. What...