Question
A convertible bond has a $1,000 par value, a 6 percent, semi-annual coupon, and a time to maturity of 12 years. The bond has a
A convertible bond has a $1,000 par value, a 6 percent, semi-annual coupon, and a time to maturity of 12 years. The bond has a conversion ratio of 20, and the current stock price is $43 per share. Comparable, non-convertible bonds have a yield to maturity of 6.8 percent. What is the minimum value of this bond?
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
