Question
Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below. Convertible Bond Characteristics Par value $ 1,000
Steven Long, a bond analyst, is analyzing a convertible bond. The characteristics of the bond are given below.
| Convertible Bond Characteristics | |||
| Par value | $ | 1,000 | |
| Annual coupon rate (annual pay) | 7.7 | % | |
| Conversion ratio | 38 | ||
| Market price | 125 | % of par | |
| Straight value | 99 | % of par | |
| Underlying Stock Characteristics | |||
| Current market price | $ | 31 | per share |
Compute the bonds conversion value and
conversion price. (Round your conversion price to 2 decimal places.)
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ISE International Financial Management
Authors: Cheol Eun, Bruce Resnick, Tuugi Chuluun
9th International Edition
1260575314, 9781260575316
