Question
A convertible bond has a face value of $1,000 and the conversion price is $40 per share. The stock is selling at $30 per share.
A convertible bond has a face value of $1,000 and the conversion price is $40 per share. The stock is selling at $30 per share. The bond pays $65 per year in interest and is selling in the market for $950. It matures in 7 years. Market rates are 10% annually. (I) What is the conversion ratio? (II) What is the conversion value?
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Cases In Healthcare Finance
Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
