Convertible bond conversion premium

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Question 1: A $1000 par value convertible bond has a conversion price of $50. It is currently selling for $1,120 despite the fact that the bond's coupon rate and the market rate are equal. The common stock obtained upon conversion is selling for $54 per share. What is the convertible bond's conversion premium?

Question 2: What is the value of a share of preferred stock that pays a $9.50 dividend, assume k is 12%.

Question 3: A $1,000 corporate bond with 10 years to maturity pays a coupon of 8% (semi-annual) and the market required rate of return is a) 7.2% and b) 10%. What is the current selling price for a) and b)?

Question 4: A U.S. Government bond with a face amount of $10,000 with 13 years to maturity is yielding 5.5%. What is the current selling price?

Reference no: EM13749429

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