Transcribed Image Text
A(n) 99?% convertible bond carries a par value of? $1,000 and aconversion ratio of 21. Assume that an investor has? $5,000 toinvest and that the convertible sells at a price of ?$1,000 ?(whichincludes a 26?% conversion? premium). How much total income?(coupon plus capital? gains) will this investment offer? if, overthe course of the next 12? months, the price of the stock moves to?$87.58 per share and the convertible trades at a price thatincludes a conversion premium of 11%? What is the holding periodreturn on this? investment? Finally, given the information in the?problem, determine what the underlying common stock is currentlyselling for.
Other questions asked by students
General Management
Q
Antigenic shifts which can dramatically influence how infective and virulent a virus is for their...
Biology
Basic Math
Statistics
Algebra
Accounting
Accounting
Accounting