Problem_Set__7_Checkpoints

Problem_Set__7_Checkpoints - BusM 401 Problem Set #7...

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BusM 401 Problem Set #7 Checkpoints Convertible Bonds Note: These checkpoints are short answers intended to help you check your work as you go along. They are not full solutions, which will be posted on Blackboard after the problem set is turned in. Remember that to get full credit for problem sets you must show all your work, and the answers listed here are usually not sufficient responses to the questions. 1. In March 1999 CNET issued 7-year convertible bonds with a coupon rate of 5%. Each $1,000 face value bond could be converted at any time before maturity into 26.7 shares of CNET stock. When the bonds were issued, the price of CNET stock was $32.22. By April 1999 the price of CNET stock had risen to $71.38. Find the conversion ratio, the conversion price, and the conversion value of the $1,000 face value CNET convertible bond as of April 1999. Conversion ratio = Conversion price = $37.45 Conversion value = 2. In 2003 James Holdings issued a 4 ¾ percent convertible subordinated debenture due
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This note was uploaded on 02/22/2012 for the course BUS M 401 taught by Professor Toddmitton during the Winter '10 term at BYU.

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Problem_Set__7_Checkpoints - BusM 401 Problem Set #7...

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