Given the following information concerning a convertible bond: ▪ Principal: $1,000 • Coupon: 5 percent . Maturity: 13 years Call price: $1,045 . Conversion price: $39 (that is, 25 shares) • Market price of the common stock: $33 • Market price of the bond: $1,020 a. What is the current yield of this bond? Round your answer to two decimal places. % b. What is the value of the bond based on the market price of the common stock? Use the given above number of shares into which the bond may be converted. Round your answer to the nearest dollar. $ c. What is the value of the common stock based on the market price of the bond? Use the given above number of shares into which the bond may be converted. Round your answer to the nearest cent. $ d. What is the premium in t
Given the following information concerning a convertible bond: ▪ Principal: $1,000 • Coupon: 5 percent . Maturity: 13 years Call price: $1,045 . Conversion price: $39 (that is, 25 shares) • Market price of the common stock: $33 • Market price of the bond: $1,020 a. What is the current yield of this bond? Round your answer to two decimal places. % b. What is the value of the bond based on the market price of the common stock? Use the given above number of shares into which the bond may be converted. Round your answer to the nearest dollar. $ c. What is the value of the common stock based on the market price of the bond? Use the given above number of shares into which the bond may be converted. Round your answer to the nearest cent. $ d. What is the premium in t
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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