Solved: What is the conversion value of the bond, Finance Basics

+44 141 628 6080
[email protected]

What is the conversion value of the bond

Problem: Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2017. What is the conversion value of the bond?

A. $707.33

B. $744.56

C. $783.75

D. $825.00

E. $866.25

View Complete Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the conversion value of the bond

Reference No:- TGS01451464

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Finance Basics

Q : Standard devaiation of expected returns

1) Calculate the expected rate of return r^y1 for stock Y (r^x = 12%) 2) Calculate the standard devaiation of expected returns ax for stock x (ay = 20.35%)

Q : What is interfaces product

Then go to the part of the company's website about its efforts toward sustainable development at What is Interface's product?

Q : Goal of wealth maximization

Problem: Describe the 10 basic principles of finance. how does these principles relate to the goal of wealth maximization.

Q : What factors determine the value of stock

Problem: What factors determine the value of stock? What do you think is the most important factor and why?

Q : What is the conversion value of the bond

Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2017. What is the conversion value

Q : Paid-in capital in excess of par value-preferred stock

The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to 1) preferred stock for $600,000. 2) preferred stock for $500,000 and Paid-in capital in excess of Par Value-Preferred stock for $100,000

Q : Representing an after-tax risk premium

The corporate investors require an after-tax return on the preferred that exceeds their after-tax return on the bonds by 1.0%, which would represent an after-tax risk premium. What coupon rate must be set on the preferred in order to issue it at p

Q : Companies pro forma financial paper

Develop a set of pro forma financials (income statement and balance sheet only) for the next fiscal year-end using the percent-of-sales method. Assume that the company's sales have increased by 15%.

Q : Bonds trade and semiannual interest

Problem: Raeo Corp. bonds trade at 100 today. The bonds pay semiannual interest that is paid on January 1 and July 1. The coupon on the bonds is 10 percent. How much will you pay for a Raeo bond if today is:

1947345

Questions
Asked

3,689

Active Tutors

1429877

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the conversion value of the bond

Reference No:- TGS01451464

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Standard devaiation of expected returns

Q : What is interfaces product

Q : Goal of wealth maximization

Q : What factors determine the value of stock

Q : What is the conversion value of the bond

Q : Paid-in capital in excess of par value-preferred stock

Q : Representing an after-tax risk premium

Q : Companies pro forma financial paper

Q : Bonds trade and semiannual interest

Find a research article related to the care of patients

Problem regarding company'' social media presence

Explain dermatitis, diagnostic criteria, treatment modality

Problem regarding principles of biomedical ethics

Find comfort and hope in the midst of sickness and disease

Incorporate a common practical tool in helping clinicians

Research drug projects - ferrous sulfate

Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the conversion value of the bond

Reference No:- TGS01451464

Recent Questions Asked Finance Basics

Q : Standard devaiation of expected returns

Q : What is interfaces product

Q : Goal of wealth maximization

Q : What factors determine the value of stock

Q : What is the conversion value of the bond

Q : Paid-in capital in excess of par value-preferred stock

Q : Representing an after-tax risk premium

Q : Companies pro forma financial paper

Q : Bonds trade and semiannual interest

Asked Questions