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Please calculate conversion ratio , conversion value , and percentage of conversion premium. thank you . a) Palacio Berhad requires RM50,000,000 for expansion and set
Please calculate conversion ratio , conversion value , and percentage of conversion premium.
thank you .
a) Palacio Berhad requires RM50,000,000 for expansion and set to use convertible bonds as their sources of financing. The convertible bonds will be 10-year bonds with 12 percent coupon and it can be converted to common share at RM50. The common share of Palacio Berhad is selling at RM40 per share. By issuing convertibles, the company expects its operating profit to increase from RM60,000,000 to RM72,000,000. The company has an outstanding share of 10 millions units. Tax rate is 40 percent. ComputeStep by Step Solution
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