with show work please
Appendix D Present value of an annuity of $1, PV IFA PVA = A Percent 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.917 0.909 0.901 0.893 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.759 1.736 1.713 1.690 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.444 2.402 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.170 3.102 3.037 4.853 4.713 4.580 4.452 4.329 4.212 4. 100 3.993 3.890 3.791 3.696 3.605 5.795 5.417 5.242 5.076 4.917 4.623 4.486 4.355 4.231 4. 111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 8.566 8. 162 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 12 11.255 10.575 9.385 8.384 7.943 7.536 7.161 6.814 6.492 6. 194 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 14 13.004 12.106 11.296 10.563 9.899 8.745 8.244 7.786 7.367 6.982 6.628 15 13.865 12.849 11.938 11.118 10.380 9. 108 8.559 8.061 7.606 7.191 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 17 15.562 14.292 13. 166 12. 166 11.274 10.477 9.763 9.122 8.022 7.549 7.120 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 19 17.226 15.678 14.324 13.134 12.085 11. 158 10.336 9.604 8.950 8.365 7.839 7.366 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 8.422 7.843 30 25.808 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 40 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 50 39. 196 25.730 18.256 15.762 13.801 12.233 10.962 9.915 9.042 8.304 Manpower Electric Company has 8 percent convertible bonds outstanding. Each bond has a $1,000 par value. The conversion ratio is 20, the stock price $34, and the bonds mature in 11 years. Use Appendix B and Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. What is the conversion value of the bond? (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Conversion value I b. Assume after one year that the common stock price falls to $30.00. What is the conversion value of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Also assume that after one year interest rates go up to 10 percent on similar bonds. There are 10 years left to maturity. What is the pure value of the bond? Use semiannual analysis. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Pure value of the bond :l d. Will the conversion value of the bond (part b) or the pure value of the bond (part c) have a stronger influence on its price in the market? 0 Conversion value of the bond O Pure value ofthe bond e. If the bond trades in the market at its pure bond value, what would be the conversion premium (stated as a percentage of the conversion value)? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Conversion premium percentage %
