Question
Question 6 (6 points) Dubai Properties plc has in issue 5% convertible debt with 8 years to redemption (at par or by converting 1,000 to
Question 6 (6 points)
Dubai Properties plc has in issue 5% convertible debt with 8 years to redemption (at par or by converting 1,000 to 9 shares). The bond can only be converted at maturity. The bonds are trading at a yield of 6.7%. Dubai Properties' shares are currently trading at 83.20 and are expected to increase in value by 6% a year over the next 8 years. The bond has just paid a coupon and there is no accrued interest to account for. The lowest value the bond can have today today is:
Question 6 options:
|
897.30
|
|
975.20
|
|
902.1
|
|
1012.46
|
|
1109.32
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started