Minimum value, Financial Management

The minimum value is the lower limit for the market value of a convertible bond. It is equal to the greater of the conversion value and the straight value. We can represent it as:

         Minimum value = Maximum (Conversion value, Straight value)

If the conversion price is considerably below the current market price of the equity share, the market price of the convertible bond will reflect the conversion value and will sell at a premium over the conversion value. In another situation, if the present market price of the equity share is lower than the conversion price, conversion of the bonds into equity shares may not at all happen and as a result the convertible bond will sell at or just higher than the straight value.

Posted Date: 9/8/2012 6:15:23 AM | Location : United States







Related Discussions:- Minimum value, Assignment Help, Ask Question on Minimum value, Get Answer, Expert's Help, Minimum value Discussions

Write discussion on Minimum value
Your posts are moderated
Related Questions
You must analyze the operating performance of your company. You will use ratio analysis and primarily using Liquidity, Profitability and Working Capital ratios. You will use a g

Shareholders versus Managers A Limited Liability company is possessed by the shareholders though in most of the cases is managed by a board of directors selected by the shareho

As of November 1, 1999, the exchange rate in between the Brazilian real and U.S. dollar is R$1.95/$. The agreement forecast for the U.S. and Brazil inflation rates for the next 1-y

Q. Describe about Self-Employment Tax? Self-Employment Tax - Most individuals who are in business for themselves, like PARTNERS, SOLE PROPRIETORS or independent contractor ar

Q. Show the Projected Balance Sheet Method? Projected Balance Sheet Method: - Under this process an approximate is made of assets and liabilities for a future date and a projec

Modern / Discounting Cash Flow Techniques : These methods generally are of more use to businesses in their investment decisions. They take into account the time value of money and

Functions of Financial Management Traditional function of financial management has been limiting the role of finance toraising and administrating of funds required by the compa

comparative analysis on these two food retailing giants

In how many area ratios are grouped Ratios can be grouped into 3 main areas: 1 Performance - how well business has done (profitability) 2 Position - short term standing

Clemson Software is considering a latest project whose data are given below.  The needed equipment has a 3-year tax life, after which it will be worthless,and it will be depreciate