Question: a. Transformer Inc issues a convertible Debenture. Each Debenture can be converted into 25 shares of common stock. The bond carries a coupon rate of

a. Transformer Inc issues a convertible Debenture. Each Debenture can be converted into 25 shares of common stock. The bond carries a coupon rate of 6% compounded semi-annually and matures in 14 years What is the conversion price? b. The shares are trading at $40.50, what is the conversion value? If the discount rate on similar bonds is 5.5% compounded semi-annually. Find the value of the bond without the conversion feature. d. What is the minimum value of the bond convertible bond? C

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