Fernandez Guitars, has a convertible bond quoted on the NYSE bond market at 85. (Bond quotes represent percentage of par value. Thus, 70 represents $700, 80 represents $800, and so on.) The bond matures in 15 years and carries a coupon rate of 6½ percent. The conversion price is 20, and the common stock is currently selling for
What is the origin of U.S. Treasury bonds being quoted in 1/32's is the question. Second part of question. Why are U.S. T-Bonds not quoted in 10th's (i.e. 100's) making it easier for the investor to understand? Have been to U.S. Treasury Department. Cannot find one article or bit of information about this.
KIC, Inc., plans to issue $5 million of perpetual bonds. The face value of each bond is $1,000. The annual coupon on the bonds is 12 percent. Market interest rates on one-year bonds are 11 percent. With equal probability, the long-term market interest rate will be either 14 percent or 7 percent next year. Assume investors are ri
A firm currently has outstanding a 9 percent, $1,000 convertible bond. The bond is convertible into 100 shares of common stock at a conversion price of $10 per share and callable at $1,090. The current market price of the firm's stock is $12 per share. The bond holder will most likely: Allow the call to be exercised realizin
An advantage of a convertible security is that it provides for deferred common stock financing. The purpose of deferring the sale of common stock is to ______ increase the leverage of the firm, dilute the owership interest, minimize dilution in earnings per share, or time the sale of common stock when the price per shar
Eastern Digital Corp. has a convertible bond outstanding with a coupon rate of 9 percent and a maturity date of 20 years. It is rated Aa, and competitive, non convertible bonds of the same rick class carry a 10 percent return. The conversion ratio is 40. Currently teh common stock is selling for $18.25 per share on the New Y
Successful forced conversion of convertible bonds through a call requires that a. call price exceed par value b. conversion value exceed call price c. bond value exceed conversion value