Herring Inc. is considering issuing 18-year, 9.0% semiannual coupon, $1,000 face value convertible bonds at a price of $1,000 each. Each bond would be convertible into 25 shares of common stock. If the bonds were not convertible, investors would require an annual nominal yield of 11.8%. What is the straight-debt value of each bond at the time of issue? Do not round your intermediate calculations.

A. $911.77
B. $713.56
C. $753.20
D. $792.84
E. $951.41


Answer: D

Business

You might also like to view...

Which of the following budgets would not be prepared for a merchandising firm?

A) Direct labor budget B) Cash budget C) Capital expenditures budget D) Sales budget

Business

Of a company's employees, 50 percent typically qualify to receive two weeks' paid vacation a year in 50 working weeks. The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $2,900

a. Estimated Liability for Vacation Pay 116 Cash 116 b. Vacation Pay Expense 232 Cash 232 c. Vacation Pay Expense 58 Estimated Liability for Vacation Pay 58 d. Cash 29 Estimated Liability for Vacation Pay 29

Business

Common-size statements are useful in assessing the changes in the composition of statements over time

Indicate whether the statement is true or false

Business

Social networks can be used to perform all of the following, EXCEPT

A) educate consumers. B) foster a sense of community. C) broadcast mainstream advertising. D) raise awareness. E) provide support.

Business