Question
Plunkett Gym Equipment, Inc., has a $1,000 convertible bond outstanding that can be converted into 25 shares of common stock. The common stock is currently
Plunkett Gym Equipment, Inc., has a $1,000 convertible bond outstanding that can be converted into 25 shares of common stock. The common stock is currently selling for $34.75 a share, and the convertible bond is selling for $960. The bond has 20 years to maturity. The bond has a coupon rate of 8% and interest rates in the market for bonds of comparable quality are 9%.
What is the conversion value of the bond?
What is the conversion premium
What is the conversion price?
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Finance Your Business Secure Funding To Start Run And Grow Your Business
Authors: The Staff Of Entrepreneur Media
1st Edition
1599185970, 978-1599185972
