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Determining values- -Convertible bond Craig's Cake Company has an outstanding issue of 9-year convertible bonds with a $
Posted: Sun Jul 03, 2022 6:44 am
by answerhappygod
- Determining Values Convertible Bond Craig S Cake Company Has An Outstanding Issue Of 9 Year Convertible Bonds With A 1 (66.51 KiB) Viewed 17 times
Determining values- -Convertible bond Craig's Cake
Company has an outstanding issue of 9-year convertible bonds with a $1,500 par value. These bonds are convertible into 75 shares of common stock. They have a 13% annual coupon interest rate, whereas the interest rate on straight bonds of similar risk is 18%. a. Calculate the straight bond value of this bond. b. Calculate the conversion (or stock) value of the bond when the market price is $23 per share of common stock. c. What is the minimum market value of the bond?