Google Answers: zero convertible bonds and stock

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Q: zero convertible bonds and stock ( No Answer, 1 Comment )

Question

Subject: zero convertible bonds and stock
Category: Business and Money > Finance
Asked by: yenchew-ga
List Price: $2.00

Posted: 28 Apr 2006 19:10 PDT
Expires: 09 May 2006 15:02 PDT
Question ID: 723839

A $100 nominal convertible zero coupon bond trades at a $10 premium
over an equivalent non-convertible bond.
It has 4.5 years of life left and each bond is convertible into one
share of the underlying common stock on maturity.
If the stock currently trades at $70.00, the volatility of the
underlying security is 25% p.a. and the risk free rate is 5.0% p.a.,
 is the bond attractively priced? Ignore dividends.

Answer

There is no answer at this time.

Comments

Subject: Re: zero convertible bonds and stock
From: redfoxjumps-ga on 28 Apr 2006 23:40 PDT

What is the risk free interesT rate at the time?
Is there any Senior debt?
Is the business cyclic?

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