Question
Your Client is Interested in the Discovery Cafe 14.875% bond maturing October 28, 2026. The bond is callable October 28, 2020 at a call premium
Your Client is Interested in the Discovery Cafe 14.875% bond maturing October 28, 2026. The bond is callable October 28, 2020 at a call premium of 11.000%. The bond is also convertible at $500/share. The common share is trading at $558.50 and the prevailing yield is 5.750% You buy the bond to settle October 28, 2015
The most you would pay for a $1000 bond if you knew that the bond would go to maturity is $
The most you would pay for a $1,000 bond if you knew that the bond would be called is $
The conversion value of the bond is $
The most you would pay for a $1000 bond is $
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Financial Statement Analysis
Authors: Martin S. Fridson, Fernando Alvarez
5th Edition
1119457149, 978-1119457145
