Suppose you own a convertible bond that has a 6.1% coupon (paid semi-annually), $1,000 par value,...
Suppose you own a convertible bond that has a 6.1% coupon (paid semi-annually), $1,000 par value, matures in 11 years, and is currently selling for $1,783.54 in the bond market. The bond can be converted into 38 shares of the firm's common stock, and the common stock is currently selling for $45.72 per share.
What is this bond's yield to maturity?
Homework Answers
FV = 1000, PMT = 30.50, N = 22, PV = -1783.54
use rate function in Excel and multiply by 2
yield to maturity = -0.7285%
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