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The 11% convertible debt of Grey plc is convertible in four years time at a...

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Finance

  1. The 11% convertible debt of Grey plc is convertible in four years time at a rate of 25 shares per bond, or redeemable in four years time at its par value of 100. The current ordinary share price of Grey plc is 3.50 and this is expected to grow by 5% per year. If Grey plc has a cost of debt of 8%, what is the current ex interest market price of its convertible debt? Work to the nearest 10p and ignore taxation.

    A.

    114.60
    B.

    103.70
    C.

    104.70
    D.

    109.90
    E.

    117.20

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