What is the floor value of this bond

Reference no: EM13261417

A convertible bond pays interest annually at a coupon rate of 5% on a par value of $1,000. The bond has 10 years maturity remaining and the discount rate on otherwise identical non-convertible debt is 6.5%. The bond is convertible into shares of common stock at a conversion price of $25 per share (i.e. the bond is exchangeable for 40 shares). Today's closing stock price was $20. What is the floor value of this bond?

Reference no: EM13261417

Questions Cloud

Final critical literature review : The Final Critical Literature Review should demonstrate significant advancement from your Progress Report - avoid the temptation of ‘cutting' and ‘pasting' large quantities of work from your Progress Report.

Explain allowed to contract until the volume : A sample of a gas originally at 29°C and 1.25 atm pressure in a 3.0 L container is allowed to contract until the volume is 2.2 L and the temperature is 11°C.

Find bound volume charge density and polarization charge : A dielectric rod of radius 10mm extends along the z axis from z=0 to z=10m. The polarization of the rod is P = [2z^2+ 10] az (az ==> is towards the z component in other words its the the unit vector k )

Compute the constant angular acceleration of the centrifuge : A centrifuge in a medical laboratory rotates at an angular speed of 3800 rev/min. Find the constant angular acceleration of the centrifuge

What is the floor value of this bond : Today's closing stock price was $20. What is the floor value of this bond?

What is the amount of the next semi-annual coupon payment : The Six-month U.S. dollar LIBOR is currently 4.375%; your firm issued floating-rate notes indexed to six-month U.S. dollar LIBOR plus 50 basis points. What is the amount of the next semi-annual coupon payment per U.S. $1,000 of face value?

Compute the molarity of chloride ions when hcl : Calculate the molarity of chloride ions when HCl is added to Co(NO3)2 ? (this is the cobalt complex and chloride experiment)

What is the expected yield to maturity : A 20-year U.S. Treasury bond with a par value of $1,000 is currently selling for $1,025 from various securities dealers. The bond carries a 6 percent coupon rate with payments made annually. If purchased today and held to maturity, what is the exp..

Explain the reaction of trans-p-anisalacetophenone : Illustrate this by showing the reaction of trans-p-anisalacetophenone with bromine and 2,4-dinitrophenylhydrazine to give the corresponding products

User Account

All Pages