Question
A firm has assets worth $100 millions, and a volatility of 30%. The risk free rate is a constant of 8%. The firm has an
A firm has assets worth $100 millions, and a volatility of 30%. The risk free rate is a constant of 8%. The firm has an outstanding bond with a 5-year maturity and maturity
value of $50 millions, convertible to 10 million shares. There are also 20 million shares outstanding. What is the value of the bond? The share price?
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Multinational Financial Management
Authors: Alan C Shapiro, Paul Hanouna
11th Edition
1119559901, 9781119559900
