Business, 27.11.2019 03:31 KhaliylTestman

Standard olive company of california has a $1,000 par value convertible bond outstanding with a coupon rate of 8 percent and a maturity date of 20 years. it is rated aa, and competitive, nonconvertible bonds of the same risk class carry a 18 percent yield. the conversion ratio is 30. currently the common stock is selling for $30 per share on the new york stock exchange.

a. what is the conversion price? (round your answer to 2 decimal places.)
b. what is the conversion value? (round your answer to 2 decimal places.)
c. compute the pure bond value. (use semiannual analysis.) use appendix b and appendix d as an approximate answer, but calculate your final answer using the formula and financial calculator methods. (do not round intermediate calculations. round your final answer to 2 decimal places.)
d. calculate the crossover point at which the pure bond value equals conversion value. (do not round intermediate calculations. round your answer to 2 decimal places.)

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