In excel Please, Thanks
1-A certain convertible bond has a conversion ratio of 40 and a conversion premium of 15 %. The current market price of the underlying common stock is $36 . What is the bond’s conversion equivalent?
The bond’s conversion equivalent is $__________________
2-You are considering investing $820 in Higgs B. Technology Inc. You can buy common stock at $27.33 per share; this stock pays no dividends. You can also buy a convertible bond ($1,000 par value) that is currently trading at $820
and has a conversion ratio of 25 . It pays $48 per year in interest. If you expect the price of the stock to rise to
$35.93 per share in 1 year, which instrument should you purchase?
3-A certain 6% annual coupon rate convertible bond (maturing in 20 years) is convertible at the holder’s option into
20 shares of common stock. The bond is currently trading at $800 . The stock (which pays 72 ¢ a share in annual dividends) is currently priced in the market at $30.19 a share.
a. What is the bond’s conversion price?
b. What is its conversion ratio?
c. What is the conversion value of this issue? What is its conversion parity?
d. What is the conversion premium, in dollars and as a percentage?
e. What is the bond’s payback period?
f. If comparably rated, nonconvertible bonds sell to yield 8 % comma what is the investment value of the convertible?