Assume that for a convertible bond: tp=.28, te =.34, B=$1,000, Bond market price =$2,005 k=.10, Cornmon Stock
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Assume that for a convertible bond:
tp=.28, te =.34, B=$1,000, Bond market price =$2,005 k=.10, Cornmon Stock Dividend =$1 per share s =40 shares, Conversion price =$25 Cornmon Stock Market Price =$50, Call Price =$1,050 Maturity: Ten years
a. Should the investor (an individual) convert voluntarily?
Yes a No a Explain.
b. Should the issuer (11: =.34) call? Yes a No a Explain.
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