21. Convertible bonds (S25.2) Zenco Inc. is financed by 3 million shares of common stock and by...
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21. Convertible bonds (S25.2) Zenco Inc. is financed by 3 million shares of common stock and by $5 million face value of 8% convertible debt maturing in 2029. Each bond has a face value of $1,000 and a conversion ratio of 200. What is the value of each convertible bond at maturity if Zenco’s net assets are worth:
a. $30 million?
b. $4 million?
c. $20 million?
d. $5 million?
Draw a figure similar to Figure 25.3c showing how the value of each convertible bond at maturity varies with the value of Zenco’s net assets.
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Related Book For
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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