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Business, 11.12.2019 19:31 mikey952

Campbell, inc., has a $1,000 face value convertible bond issue that is currently selling in the market for $990. each bond is exchangeable at any time for 39 shares of the company’s stock. the convertible bond has a 5.4 percent coupon, payable semiannually. similar nonconvertible bonds are priced to yield 8 percent. the bond matures in 20 years. stock in the company sells for $22 per share. a-1. what is the conversion ratio? a-2. what is the conversion price? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) a-3. what is the conversion premium? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) b-1. what is the straight bond value? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) b-2. what is the conversion value? (do not round intermediate calculations and round your answer to the nearest whole dollar, e. g., 32.) c. what would the stock price have to be for the conversion value and the straight bond value to be equal? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) d. what is the option value of the bond? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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Campbell, inc., has a $1,000 face value convertible bond issue that is currently selling in the mark...
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