Find the duration of a 6 coupon bond making annual coupon


1) A convertible bond has the following features:

Coupon

7.25%

Maturity

June 15, 2020

Market price of bond

$83.00

Market price of underlying common stock

$38.00

Annual dividend

$1.20

Conversion ratio

18.50 shares

Calculate the conversion premium for this bond.

2) Find the duration of a 6% coupon bond making annual coupon payments if it has two years until maturity and a yield to maturity of 7%.

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Financial Management: Find the duration of a 6 coupon bond making annual coupon
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