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Urgent !!! (b) Euphoric Berhad needs to raise RM20 million for future expansion, and it plans to issue 15-year annual coupon bonds to raise this
Urgent !!!
(b) Euphoric Berhad needs to raise RM20 million for future expansion, and it plans to issue 15-year annual coupon bonds to raise this capital. Suppose the market requires the return of the company's bonds to be 4%, and the company decides to issue them at par value of RM1,000. (i) Assume that these bonds are convertible at any time up to maturity at a rate of ten shares of common stock for every convertible bond held. What is the conversion ratio and conversion price? (3 marks) (ii) Would you exercise your rights to convert these bonds into common stock if the market price of the common stock is RM105? Explain your decision. (5 marks) Due to the ongoing Covid-19 pandemic, there has been a persistent high volatility in the stock price movement in Bursa Malaysia stock market. Being in the F&B industry, whereby the company manufactures and supplies disposable food packaging products, how would you forecast the stock price of Euphoric Berhad? Is it going to increase or decreaseStep by Step Solution
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