01 Aug Maple Aircraft has issued a 4?% convertible subordinated debenture due 3 years from now. The conversion price is $47 and the debenture is callable at 102.75% of face value. The mark
Maple Aircraft has issued a 4¾% convertible subordinated debenture due 3 years from now. The conversion price is $47 and the debenture is callable at 102.75% of face value. The market price of the convertible is 91% of face value, and the price of the common is $41.50. Assume that the value of the bond in the absence of a conversion feature is about 65% of face value.
- In the absence of the conversion feature, what is the current yield and yield to maturity?
- What is the conversion ratio of the debenture?
- If the conversion ratio were 50, what would be the conversion price?
- What is the conversion value?
- At what stock price is the conversion value equal to the bond value?
- Can the market price be less than the conversion value?
- How much is the convertible holder paying for the option to buy one share of common stock?
- By how much does the common have to rise after three years to justify conversion?
Cite three (3) peer-reviewed articles
Get a custom paper at collepals.com for only $10 a page
This question was first posted at collepals.com!
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteEdu. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
Do you need help with this question?
Get assignment help from WriteEdu.com Paper Writing Website and forget about your problems.
WriteEdu provides custom & cheap essay writing 100% original, plagiarism free essays, assignments & dissertations.
With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Chat with us today! We are always waiting to answer all your questions.