They will mature twenty years from now the stock is now


Use the following information for questions .

Five years ago, the Williams Company issued $10 million of convertible bonds with a par value of $1,000 each and a coupon rate of 6%, and with each convertible into 20 shares.

They will mature twenty years from now. The stock is now trading at $60 per share. The market interest rate is 8%.

1. What is the conversion price?

2. What is the conversion value?

3. What is the conversion ratio?

4. What is the pure bond value?

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Financial Management: They will mature twenty years from now the stock is now
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