Question: QUESTION 1 (25 MARKS) Syariman Berhad has decided to issue RM150 million convertible bonds that pays a 9 percent coupon rate and mature in 15

QUESTION 1 (25 MARKS) Syariman Berhad has decided to issue RM150 million convertible bonds that pays a 9 percent coupon rate and mature in 15 years. The conversion price is RM 37.5 per share. The company's common share is currently selling at RM22.50. The firm's operating profit is RM 30 million and expected to increase by 30 percent after issuing convertible bonds. Currently, the company has 15 million shares outstanding and tax rate at 30 percent.

From the information given, calculate:

a) Conversion ratio (3 marks)

b) Conversion premium in percentage and RM (5 marks)

c) The conversion value (3 marks)

d) Earnings per share before conversion and after full conversion. (8 marks)

e) Explain four (4) reasons why the company uses stock split. (6 marks)

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