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You are the CFO of RealNetworks on July 1, 2008. The company's stock price is $9.74 and its convertible debt is now callable. See the
You are the CFO of RealNetworks on July 1, 2008. The company's stock price is $9.74 and its convertible debt is now callable. See the table below: Convertible Subordinated Notes Issued under U.S. SEC Rule 144A Aggregate principal amount Proceeds net of offering costs Coupon Conversion ratio Call date Call price Maturity $100 million $97.0 million 0% 107.5650 shares per $1,000 principal amount July 1, 2008 100% July 1, 2010 a. What is the value of the shares the bondholders would receive per $1.000 bond if they convert? a. What is the value of the shares the bondholders would receive per $1,000 bond if they convert? The value the bondholders would receive is $. (Round to the nearest cent.) b. What is the value per $1,000 bond they would receive under the call? The value they would receive under the call is $. (Round to the nearest cent.) c. If you call the bonds, will the bondholders convert into shares or accept the call price? (Select from the drop-down menus.) Bondholders convert into shares if you call the bonds, as the value of converting is than the value received under the call
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