Please Help me..
1. You own a bond with a 7.8 percent coupon rate and a yield to call of 8.7 percent. The bond currently sells for $1,102. If the bond is callable in five years, what is the call premium of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Call Premium = $_________
2. A convertible bond has a 6 percent coupon, paid semiannually, and will mature in 15 years. If the bond were not convertible, it would be priced to yield 5 percent. The conversion ratio on the bond is 25 and the stock is currently selling for $61 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Minimum Value $________
Please Help me..
1. You own a bond with a 7.8 percent coupon rate and a yield to call of 8.7 percent. The bond currently sells for $1,102. If the bond is callable in five years, what is the call premium of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Call Premium = $_________
| 2. A convertible bond has a 6 percent coupon, paid semiannually, and will mature in 15 years. If the bond were not convertible, it would be priced to yield 5 percent. The conversion ratio on the bond is 25 and the stock is currently selling for $61 per share. What is the minimum value of this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Minimum Value $________ |
Related questions
| You have been hired to value a new 10-year callable, convertible bond. The bond has a coupon rate of 3.6 percent, payable semiannually, and its face value is $1,000. The conversion price is $57, and the stock currently sells for $44. |
| a. | What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) |
| Minimum value of the bond | $ |
| b. | What is the conversion premium for this bond? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Conversion premium | % |
