Quantitative business analysis

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Quantitative business analysis:

Jan Yu purchased seven IBM $ 1,000 convertible bonds at $ 105. each bond was convertible  to 25 shares of IBM stock in 5 years. at the end of five years , IBM stock was selling at 97$, if Jan converted, hat would be her five-year capitol gain? Returning to the first problem assume that the stock price after five years was $ 38. how much more money would Jan get by cashing I the bonds rather than converting to stock?  

the city of Jamestown, Virginia, issued $ 27,000,000 worth of callable bonds at 9 % on January 1, 2008. the bonds were due in 2023. if interest rates were to fall from 6.5%  on January 1, 2015, how much could Jamestown save by reissuing the bonds at the 6.5% rate on January 1, 201?

Assume hat an investor had purchased $ 500,000 worth of the Jamestown bonds referred to in problem three. how much interest will he lose from having the bonds called if he reinvested in the new bond issue?

 

Reference no: EM13707488

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