Question
QUESTION 133 Badger owns a convertible bond with an 8% annual coupon and a $1,000 face value. It matures in ten years and can be
QUESTION 133
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Badger owns a convertible bond with an 8% annual coupon and a $1,000 face value. It matures in ten years and can be exchanged for 45 shares of ACE stock, which is trading at $27 per share. Similar nonconvertible bonds are priced to yield 10%. The value of the convertible bond is at least __________?
a. $215.00.
b. $877.11.
c. $1,000.00.
d. $1,215.00.
QUESTION 134
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Xyzal owns a convertible bond with a 9% annual coupon and a $1,000 face value. It matures in 12 years and can be exchanged for 30 shares of Zyrtec stock, which is trading at $35 per share. Similar nonconvertible bonds are priced to yield 7.5%. The value of the convertible bond is at least __________?
a. $1,000.00.
b. $1,050.00.
c. $1,116.03.
d. $1,197.34.
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Financial Crimes
Authors: Maximilian Edelbacher, Peter Kratcoski, Michael Theil
1st Edition
0367866528, 978-0367866525
