Question
10.12 Assume you just paid $1253 for a convertible bond that carries a(n) 8.98% coupon and has 20 years to maturity. The bond can be
10.12
Assume you just paid $1253 for a convertible bond that carries a(n) 8.98% coupon and has 20 years to maturity. The bond can be converted into 24 shares of stock, which are now trading at $50 a share. Find the bond investment value of this issue, given that comparable nonconvertible bonds are currently selling to yield 12.49%.
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Financial Management Theory And Practice
Authors: Eugene F Brigham, Michael C Ehrhardt
11th Edition
0324259689, 9780324259681
