Minimum value, Financial Management

Assignment Help:

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.


Related Discussions:- Minimum value

Operating cycle, applicability of an operating cycle in vegetable growing b...

applicability of an operating cycle in vegetable growing business

Cash flow, how do you find total cash outflow through maturity

how do you find total cash outflow through maturity

What do you meant by common stocks in the financial term, What do you meant...

What do you meant by common stocks in the financial term? Common Stocks: Common stocks illustrate ownership interests into the firm. Common stockholders obtain dividends (wh

State about the country analysis and political risk, Country analysis and p...

Country analysis and political risk Country analysis could use tools for example PEST factors in order to strategically analyse countries. Political risk

Inventory turnover ratio or stock turnover ratio, I need a report on the to...

I need a report on the topic Inventory Turnover Ratio. Can you please assist me for Inventory Turnover Ratio report for about 2500 words?

Discuss how a firm can maintain adequate working capital, Question1 Analys...

Question1 Analyse the financial requirements of a FMCG company Question2 If you are an investor and are interested in finding out the value of an amount of Rs 10,000 to be re

Capital investment plans , Report based on Capital Investment Plans   ...

Report based on Capital Investment Plans   To analyze the capital investment plans of Hatsun Agro Products Limited (HAPL) we shall look at the capital expenditure of HAPL in

Asset-backed and mortgage-backed securities, When financial assets or bonds...

When financial assets or bonds are pooled together and offered to the investors for receiving the inflow of funds from these underlying assets, they are termed as asset

Net present value (npv), Net Present Value (NPV) In corporate finance, ...

Net Present Value (NPV) In corporate finance, the current value (the value of cash to be received in the future expressed in today's dollars) of an investment in excess of the

What is marginal cost of capital, What is Marginal cost of capital Marg...

What is Marginal cost of capital Marginal cost of capital, by contrast refers to incrementalcost associated with new funds raised by firm. Marginal cost is the specific conc

Write Your Message!

Captcha
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