a ccovertible bond has a face value of 1000 and a conversion price of 12.50. the

Question

a ccovertible bond has a face value of 1000 and a conversion price of 12.50. the bond has a 6 percent coupon, pays interest semiannually, and matures in 12 years. similar bonds are yielding 9 percent. the current price of the stock is 13.40 per share. what is the straight bond value a ccovertible bond has a face value of 1000 and a conversion price of 12.50. the bond has a 6 percent coupon, pays interest semiannually, and matures in 12 years. similar bonds are yielding 9 percent. the current price of the stock is 13.40 per share. what is the straight bond value a ccovertible bond has a face value of 1000 and a conversion price of 12.50. the bond has a 6 percent coupon, pays interest semiannually, and matures in 12 years. similar bonds are yielding 9 percent. the current price of the stock is 13.40 per share. what is the straight bond value

Explanation / Answer

Value of bond is $ 791.

Since, question asking about straigh bond not for convertible bond. So, independent value of bonds is calculated.

Working:

Value of Straight bond = Present value of cash flow fom bond = Present Value of interest +Present value of face value = 435+356 = $        791

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