Question
Your boss asks you to value a new 30-year convertible bond. The bonds coupon rate = 3.2% and is paid semi-annually. Face value of the
Your boss asks you to value a new 30-year convertible bond. The bonds coupon rate = 3.2% and is paid semi-annually. Face value of the bond = $1,000. The conversion price is $58 and the stock sells for $39.
Assume you were holding the convertible bond and the stock price rose to above $58/share. Would you convert the bond into the stock or hold onto the bond?
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The New Public Finance
Authors: Inge Kaul, Pedro Condeicao
1st Edition
0195179978, 978-0195179972
