How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Manal Elkhoshkhany Your Own Question
Manal Elkhoshkhany
Manal Elkhoshkhany, Tutor
Category: Homework
Satisfied Customers: 9884
Experience:  More than 5000 online tutoring sessions.
Type Your Homework Question Here...
Manal Elkhoshkhany is online now
A new question is answered every 9 seconds

A convertible bond has the following features: Principal

Resolved Question:

A convertible bond has the following features:
Principal $1,000

Maturity date
20 years

$80 (8% coupon) paid yearly

Call price

Exercise price
$65 a share

The bond may be converted into how many shares?
If comparable non-convertible debt offered an annual yield of 12 percent, what would be the value of this bond as debt?
If the stock were selling for $52, what is the value of the bond in terms of stock?
Would you expect the bond to sell for its value as debt (i.e., the value determined in b) if the price of the stock were $52?
If the price of the bond were $960, what are the premiums paid over the bond's value as stock and its value as debt?
If the price of the stock were $35, what would be the minimum price of the bond?
What is the probability that the bond will be called when the price of the stock is $52?
If the price of the stock rose to $73, what would happen to the price of the bond?
If the price of the stock were $73, what would the investor receive if the bond were called?
Submitted: 5 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 5 years ago.
You can view this answer by clicking here to Register or Login and paying $3.
If you've already paid for this answer, simply Login.
Manal Elkhoshkhany and other Homework Specialists are ready to help you