Cannon Manufacturing is considering issuing 18-year, 7.8% annual coupon, $1,000 face value convertible bonds at a price of $1,000 each. Each bond would be convertible into 22 shares of common stock. If the bonds were not convertible, investors would require an annual yield of 11.8%. The stock's current price is $22.00, its expected dividend is $2.60, and its expected growth rate is 5.9%. The bonds are noncallable for 10 years. What is the bond's conversion value in Year 5? Do not round your intermediate calculations.
A. $709.12
B. $773.58
C. $644.65
D. $547.95
E. $676.88
Answer: C
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A Canadian software company decides to buy majority stakes in a Chinese firm producing software. The company even adds to its Chinese production capacity. Which of the following could be a potential disadvantage of this direct investment?
A) The Canadian firm will find it difficult to achieve economies of scale. B) This is the least financially rewarding mode of international expansion. C) The Canadian firm will have very limited control on its Chinese investment. D) The Canadian firm will be subject to the piracy problems in China. E) The Canadian firm will be subject to a higher cost of production in China.
Examples of tangible factors in the negotiation process is the need to "win," the need to look "good," and the need to appear "fair."
Answer the following statement true (T) or false (F)
The maximum allowable expenditure is the
a. appropriation. b. allowance. c. allocation. d. committed fixed cost.
Which of the following is NOT a characteristic of tacit knowledge?
a. Difficult to express b. Experientially based c. Possessed by the person d. Possessed by the organization/department/team