Determining values-Convertible bond Eastern Clock Company has an outstanding issue of convertible bonds with a $1,5 convertible into 60 shares of common stock. They have a 14% annual coupon interest rate and a 8-year maturity. The interes currently 9%. 1. Calculate the straight bond value of the bond. . Calculate the conversion (or stock) value of the bond when the market price of the common stock is $50 per share. What is the least you would expect the bond to sell for, regardless of the common stock price behavior? . The straight value of the bond is S (Round to the nearest cent.)

Question 1 - Calculate the dollar price of a 7-year bond with a par value of $1,000 that pays a 9.5% coupon semiannually. The yield to maturity is 8.1%.Is the bond trading at a premium or a discount? Select the answer below. # of periods - Coupon Payments - Bond Price- Trading-

Problem: A company has issued three bonds (Par Value S1,000) with the following data: What happends to the bond prices as each bond approaches the maturity date? (assume similar bonds with 15 year maturity sell for 10% coupon rate and that this rate stays const. over time) Market rate 10% 5-years ago 10-years ago 25 year bond Issue date Maturity Coupon rate Coupon Payment Today 15 year bond 10% 20 year bond 7% 13% 70 100 130 15 15 15 Positive Values Positive Values Positive Values 6. 8. 9. 10 11 12 13 14

Determining values: Convertible bond Craig's Cake Company has an outstanding issue of 15-year convertible bonds with a $1,000 par value. These bonds are con vertible into 80 shares of common stock. They have a 13% annual coupon interest rate, whereas the interest rate on straight bonds of similar risk is 16%.