Question
The following facts apply to a convertible bond making semiannual payments: Conversion price $ 55 /share Coupon rate 5.6 % Par value $ 1,000 Yield
| The following facts apply to a convertible bond making semiannual payments: |
| Conversion price | $ | 55 | /share |
| Coupon rate | 5.6 | % | |
| Par value | $ | 1,000 | |
| Yield on nonconvertible debentures of same quality | 6 | % | |
| Maturity | 20 | years | |
| Market price of stock | $ | 54 | /share |
| a. | What is the minimum price at which the convertible should sell? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Minimum price | $ |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
