The bond pays 60 per year interest and is selling in the

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A convertible bond has a face value of $1,000, and the conversion price is $50 per share. The stock is selling at $42 per share. The bond pays $60 per year interest and is selling in the market for $930. It matures in 15 years.

Market rates are 10 percent per year.

a. What is the conversion ratio?

b. What is the conversion value?

c. What is the conversion premium (in dollars and percent)?

d. What is the floor value or pure bond value?

Reference no: EM13476983

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