$30 million in 8 percent convertible bonds?

Question

$30 million in 8 percent convertible bonds

outstanding. The conversion ratio is 50; the stock price is $17; and the bond

matures in 15 years. The bonds are currently selling at a conversion premium of

$60 over their conversion value. If the price of the common stock rises to $23 on this date next year, what would your rate of return be if you bought a convertible bond today and sold it in one year? Assume on this date next year, the conversion premium has shrunk

from $60 to $10.

Answer 1

do your own homework, huh?