Question
A convertible bond has the following features: Principal $1,000 Maturity date 20 years Interest $80 (8% coupon) annual Call price $1,050 Exercise price $65 a
A convertible bond has the following features:
- Principal $1,000
- Maturity date 20 years
- Interest $80 (8% coupon) annual
- Call price $1,050
- Exercise price $65 a share
- Market Yield 12%
If the price of the bond were $960, what are the premiums paid over the bond's value as stock if the market price of the stock is $52? Just type the whole number to the nearest dollar, no symbols.
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes
3rd Edition
0073382426, 9780073382425
