1. Explain the potential advantages and disadvantages of a firm issuing convertible bonds as opposed to a straight bond issue.
2. Two bonds have a coupon rate of 6.5 percent semi-annual payments,face valu f $1.0, nd yields to maturity of 7.1 Bon percent. Bond S matures in 6 years and bond L matures in 12 years. What isthe difference in the current prices of these bonds?
3. You recently purchased a stock for $50. It is now worth $75, and it paid a $15 dividend during the two years you held it. What is your annualized rate of return on this stock?