Multiple Choice
Herring Inc.is considering issuing 15-year,8% 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 10%.What is the straight-debt value of each bond at the time of issue?
A) $725.58
B) $763.76
C) $803.96
D) $846.28
E) $888.59
Correct Answer:
Verified
Correct Answer:
Verified
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