Question
The following facts apply to a convertible bond making semiannual payments: Conversion price $ 46 /share Coupon rate 7.2 % Par value $ 1,000 Yield
The following facts apply to a convertible bond making semiannual payments:
Conversion price $ 46 /share
Coupon rate 7.2 %
Par value $ 1,000
Yield on nonconvertible debentures of same quality 8 %
Maturity 30 years
Market price of stock $ 45 /share
What is the minimum price at which the convertible should sell?
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Airline Finance
Authors: Peter S. Morrell
4th Edition
1351959743, 978-1351959742
