The Theoretical Floor Value For A Convertible Bond Is Its

The theoretical floor value for a convertible bond is its.

The theoretical floor value for a convertible bond is its. Question 7 of 20. The conversion value represents the value of the common stock into which the bond can be converted. The bond floor is the value at which the. The theoretical floor value for a convertible bond is its a.

As the price of common stock increases the market price of a convertible bond and the conversion value increase. The lowest value that convertible bonds can fall to given the present value of the remaining future cash flows and principal repayment. Conversion value is greater than the pure bond value. Conversion value equals the pure bond value.

D pure bond value. 2 the theoretical floor value for a convertible bond is its choose one answer. The theoretical floor value for a convertible bond is its. Bond valuation is a technique for determining the theoretical fair value of a particular bond.

It is convertible into 15 common shares which presently sell for 50 per share. The conversion premium is 5. The investment value is the theoretical value at which the bond would trade if it were not convertible. The theoretical floor value for a convertible bond is its.

Bond valuation includes calculating the present value of the bond s future interest payments also. It is convertible into 15 shares of common stock that presently sell for 50 per share. The theoretical floor value for a convertible bond is its. The value of these payments represents a convertible bond s floor or minimum value.

True false question 30 marks. A convertible bond is currently selling for 855. It should trade for at least its floor value regardless of how low the stock drops. The minimum theoretical value of a warrant to buy 6 shares of a firm s stock at 50 per share is 10 what is the current market price of the firm s stock.

A convertible bond is currently selling for 970. This represents the security s floor value or the minimum price at which it should trade as a nonconvertible bond. A 51 67 b 50 00 c 60 00 d 5 00. Downside protection is ineffectual if the bond is bought at a large premium over floor value interest rates on the debt instrument part of a convertible bond are frequently below market interest rates.