Question
ABC Inc. has an outstanding convertible bond. The bond can be converted into 60 shares of companys stock currently trading at $14/share. The bond has
ABC Inc. has an outstanding convertible bond. The bond can be converted into 60 shares of companys stock currently trading at $14/share. The bond has 10 years of remaining maturity and a 5% coupon paid annually. ABCs regular bond (i.e., the debt without a conversion feature) is currently trading to yield 8%. What is the minimum price of the ABCs convertible bond?
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Financial Management Principles And Applications
Authors: J William Petty, Sheridan Titman, Arthur J Keown, John D Martin, Peter Martin, Michael Burrow, Hoa Nguyen
6th Edition
1442539178, 9781442539174
