Question 9:

You own a bond with a face value of $100 000 and a conversion ratio of 350.

What is the conversion price?

Question 10:

You are the CFO of Barlow Property Group on 30 June 2019. The company's share price is

$9.82

and its convertible debt is now callable. See the table below:

Convertible subordinated notes
Aggregate principal amount	$100 million
Proceeds net of offering costs	$97 million
Coupon	0%
Conversion ratio	107.3873 shares per $1 000 principal amount
Call date	1 July 2019
Call price	100%
Maturity	1 July 2021

a. What is the value of the shares the bondholders would receive per $1 000 bond if they convert?

b. What is the value per $1 000 bond they would receive under the call?

c. If you call the bonds, will the bondholders convert into shares or accept the call price?