Question
It is said that any 20-year convertible bond paying 6% per year can be converted into 20 common shares at the option of the holder.
It is said that any 20-year convertible bond paying 6% per year can be converted into 20 common shares at the option of the holder. This bond is currently traded at $800 and the market price of the stock that pays $0.75 in annual dividends is $35. What is the conversion value of this bond?
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Financial Markets And Institutions An Introduction To Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
3rd Edition
0073250937, 9780073250939
