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  1. business
  2. accounting
  3. b) twocow inc. has a $1,000 face value convertible

B) TwoCow Inc. has a $1,000 face value convertible bond issue. Each bond is exchangeable...

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Accounting

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B) TwoCow Inc. has a $1,000 face value convertible bond issue. Each bond is exchangeable at any time before its maturity for 50 shares of the company's stock. The convertible bond carries a 5.5% coupon, payable annually. Similar non- convertible bonds are priced to yield 4.69%. The bond matures in 5 years. TwoCow shares sell for $15.38 per share in the market. a) What are the conversion ratio, conversion price, and conversion premium? b) What is the straight bond value? The conversion value? What is the convertible bond price? c) In Part b), what would the stock price have to be for the conversion value and the straight bond value to be equal

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