Consider the following convertible bond calculate the, Financial Management

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Consider the following convertible bond calculate the

Consider the following convertible bond:

· Par value = $1000

· Coupon rate = 6.0%

· Market price of convertible bond = $950

· Conversion ratio = 30

· Estimated value of option-free bond = $750

· The current price of the common stock is $30 and the annual dividend is $1.50

Calculate the following:

a) Conversion value

b) Market conversion price

c) Market conversion premium ratio

d) Market value of convertible bond if stock price is $40

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Financial Management: Consider the following convertible bond calculate the

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Financial Management: Consider the following convertible bond calculate the

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