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Assume Uber Technologies Inc., just issued a zero-coupon convertible bond due in 10 years. The face amount of the bond is $1,000. The conversion ratio
- Assume Uber Technologies Inc., just issued a zero-coupon convertible bond due in 10 years. The face amount of the bond is $1,000. The conversion ratio is 25 shares. The appropriate interest rate (Kd) is 12%. The current stock price is $12 per share. Each convertible is trading at $400 in the market. 5 marks
- What is the Macaulay duration of the Uber Technologies Inc. bond?
- What is the conversion value?
- What is the straight bond value?
- What is the option value of the bond?
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International Financial Markets And The Firm
Authors: Piet Sercu, Raman Uppal
1st Edition
1861523548, 978-1861523549
