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Investments. Week 9-2. FIN3501. Charles Benson. Business.

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Investments1JKInstructor Charles BensonInvestmentsDecember 19, 2015InvestmentsInvestments21. What differentiates convertible bonds from other bonds?Convertible bonds can be changed over into a sure number of basic shares after a predeterminedtimeframe at the alternative of the financial specialists. Till the bonds are either changed over oruntil development, whichever is prior, the convertible bondholders are qualified for getperiodical coupon installments. Other typical bonds don't offer this change include and will stayas bonds till their development period.2. How is the value of a convertible bond in terms of stock determined? What effect doesthis conversion value have on the price of the bond?The conversion value can be determined as the number of shares that the bond can be convertedinto multiplied by the market price per share.Conversion value = Number of shares * Market price per shareFace value of convertible bond = Number of shares * Exercise priceIf the conversion value is higher, the price of the bond also would be higher and vice versa.3. How is the value of a convertible bond in terms of debt determined? What effect doesthis investment value have on the price of the bond?The value of a convertible bond as far as obligation is the value of the bond itself. At the end ofthe day, the business sector cost of the convertible bond itself is the value of a convertible bondas far as obligation. Be that as it may, this value of a convertibl

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