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Dotermining values - Convertible bond Eastem Clock Company has an outstanding issue of corvertible bonds with a $1,000 par value. These bonds are converfible into
Dotermining values - Convertible bond Eastem Clock Company has an outstanding issue of corvertible bonds with a $1,000 par value. These bonds are converfible into 50 shares of comme slock. They have a 9% annual coupon interest rale and a 19-year maturity. The interest rate on a straight bond of simlar risk is currently 11% a. Calculate the straight bond value of the bond b. Calculate the conversion (or stock) value of the bond when the market price of the common slock is $45 per share c. What is the least you would expect the bond to sell for, regardloss of the comenon stock price behavior? a. The straight value of the bond is ? (Round to the nearest cent.) b. The conversion (or stock) value of the bond when the markat price of the common stock is $45 per share is $ (Round to the nearest dollar.) c. The least you would expect the bond to sell for, regardless of the common stock ptice behavior is $ (Rhound to the nearest cent.)
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