Hannon Home Products, Inc., recently issued
Not what you're looking for?
Hannon Home Products, Inc., recently issued $430,000 worth of 8 percent convertible
debentures. Each convertible bond has a face value of $1,000. Each convertible bond can be
converted into 28 shares of the firm's common stock anytime before maturity.The current
price of Hannon's common stock is $31.25 per share, and the market value of each of
Hannon's convertible bonds is $1,180.Answer the following questions related to Hannon's
convertible bonds:
a. What is the conversion ratio?
b. What is the conversion price?
c. What is the conversion premium?
d. What is the conversion value?
e. If the value of Hannon's common stock increases by $2, what will the conversion
value be?
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to answer bond conversion ratio, price, premium, and value.
Solution Preview
bonds. need calculations please
Hannon Home Products, Inc., recently issued $430,000 worth of 8 percent convertible
debentures. Each convertible bond has a face value of $1,000. Each convertible bond can be converted into 28 shares of the firm's common stock anytime before ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.