ABC Ltd. is planning to expand its business and therefore raising fund by issuing a convertible bond of 10 crore. An investor “Mr. X” is interested…
CA Final · Advanced Financial Management · MTP · May 2024
ABC Ltd. is planning to expand its business and therefore raising fund by issuing a convertible bond of 10 crore. An investor “Mr. X” is interested to invest in the bond of ABC Ltd. Mr. X has following data related to the convertible bond. The data given below relates to a convertible bond: Face value 250 Coupon rate 12% No. of shares per bond 20 Market price of share 12 Straight value of bond 235 Market price of convertible bond 265 Maturity 5 Years You, being an expert of the matter, are required to answer his questions. Select the most appropriate alternative:
Suggested Answer and Working Notes:
Correct Answer: Option (D)
12.77%
Topics: Security Valuation
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