CONVERTIBLE MEASURES FOR THE CONVERTIBLE BOND OF COMPANY H
Question 20.4: CONVERTIBLE MEASURES FOR THE CONVERTIBLE BOND OF COMPANY H
\text { Market conversion price }=\frac{\$ 800}{150 \text { shares }}=\$ 5.333 \text { per share }
\text { Market conversion premium per share }=\$ 5.333-\$ 5=\$ 0.333
\text { Market conversion premium ratio }=\frac{\$ 0.333}{\$ 5}=6.66 \%
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Inputs:
C = $60/2 = $30
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r = 8%/2 = 4%
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