Convertible bond is currently selling

Assignment Help Financial Management
Reference no: EM131310166

1. A bond with a coupon rate of 6.5%, maturing in 10 years at a value of $1,000 and current market price of $695 will have a current yield of

A. 11.3%

B. 10.2%

C. 9.4%

D. 8.5%

2. A convertible bond is currently selling for $1,125. It is convertible into 20 shares of common which presently sell for $40 per share. The conversion premium is

A. $325

B. $215

C. 66.74 shares

D. 23.8 shares

Reference no: EM131310166

Questions Cloud

Operating motive for merger and consolidation : The Prad Corporation is considering a merger with the Stone Company which has 500,000 outstanding shares selling for $30. An investment banker has advised that to succeed in its merger Prad Corp. would have to offer $45 per share for Stone's stock. W..
Determine the value of salary surveys to an organization : Describe the compensation philosophy of Maersk and how the market influences this philosophy. Determine the value of salary surveys to an organization
Describe e-learning as a training method : Describe e-learning as a training method.Describe the potential barriers of e-learning readiness. Analyze how e-learning readiness has affected your success at Ashford University. Explain what a trainer can do to prepare learners for e-learning.
Name two other axes that would be of interest to an analyst : In the NRL classification scheme for the "time of introduction" axis, must the development phase precede the maintenance and operation phases, and must the maintenance phase precede the operation phase? Justify your answer.
Convertible bond is currently selling : A bond with a coupon rate of 6.5%, maturing in 10 years at a value of $1,000 and current market price of $695 will have a current yield of. A convertible bond is currently selling for $1,125. It is convertible into 20 shares of common which presently..
Stock typically issued by publicly traded organizations : What are the key types of stock typically issued by publicly traded organizations? If you were to invest $10,000 of your own funds, which type would you choose, why? What are junk bonds and would you recommend investing in them? Defend your answer. I..
Develop policies that are compliant with employment laws : Choose three (3) employment tests (e.g., drug tests, medical examinations, HIV tests, generic tests, polygraphs, honesty tests, psychological tests, intelligence and skills tests, and physical fitness, etc.) that the HR Department should use. Just..
Discuss the level of anonymity of each level of sanitization : Comprehensive sanitization, in which all data is analyzed and sanitized as in information-tracking and format sanitizationDiscuss the level of anonymity of each level of sanitization. Which level could be automated, and to what degree would human o..
What you believe are the essential elements of an acceptable : Give your opinion on what you believe are the essential elements of an acceptable use policy for remote access. Elaborate on each item and justify its importance.

Reviews

Write a Review

 

Financial Management Questions & Answers

  What do investors demand as the expected rate of return

Estimate the beta for your firm if your projects have similar betas, but your firm will carry a debt/asset ratio of 1/3.

  Firm is evaluating project-what is the profitability index

A firm is evaluating a project which will cost $10,269 today and provide cash flows in years 1, 2, and 3 of $7,560, $3,286, $3,268 and, respectively. The firm’s discount rate is 8%. What is the profitability index?

  Calculate the rate of return on equity for each firm

Firms HL and LL are identical except for their financial leverage ratios and the interest rates they pay on debt. Each has $11 million in invested capital, has $3.3 million of EBIT, and is in the 40% federal-plus-state tax bracket. Calculate the retu..

  Estimate the country equity risk premium

You are trying to estimate the country equity risk premium for Poland. You find that S&P has assigned an A rating to Poland and that Poland has issued euro-denominated Bonds that yield 7.6%. in the market currently.

  What is the price of the bond

Cisco has issued an 7%, 20-year bond with a par value of 1000$ that pays interest quarterly. If the yield to maturity 8.5%, what is the price of the bond?

  The flotation costs of debentures-effective cost of credit

Selection of a source of short-term financing should include all of the following EXCEPT a. The effect of the use of credit from a particular sorce on the cost and availability of other sources of credit b. The flotation costs of debentures c. The ef..

  Modification the buyer wants made to the original product

A special order to purchase 10,000 units was recently received. There is enough capacity to fill the order and filling this order would not disrupt current operations. The Cintron Company would incur an additional $5 per unit for additional labor cos..

  Analysts expect that the dividend will grow at a rate

NYC Inc. has a current dividend of $3.00 per share (D0 = $3.00). Analysts expect that the dividend will grow at a rate of 25 percent per year for the next three years, and thereafter it will grow at a constant rate of 10 percent per year. The company..

  What is the difference between a business and a pure charity

From a financial perspective, briefly describe the concept of a business. What is the difference between a business and a pure charity? What are the three legal forms of business organization and what are their advantages and disadvantages?

  What is expected time to complete task with an optimistic

What is the expected time to complete a task with an optimistic, most likely, and pessimistic times of 3, 4 and 7 days respectively? What is the standard deviation of the same task, assuming the estimates were made at the 99% plus level?

  Under applied and over applied overhead

Osborn Manufacturing uses a predetermined overhead rate of $19.30 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $252,830 of total manufacturing overhead for an estimated activity level of 13,100 direct labo..

  How much can the government expect to receive per bond

Suppose the equity market premium is 0.04 and a security with a beta of +1.5 has an equilibrium expected rate of return of 0.10. If the government wishes to issue risk-free zero-coupon bonds with a term to maturity of one period and a face value per ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd