Calculate the convertible’s current yield to maturity. If a “straight” Bildon fixed-income issue

Author:

January 11th, 2018

You are considering the purchase of a convertible bond issued by Bildon Enterprises, a noninvestment- grade medical service firm. The issue has seven years to maturity and pays a semiannual coupon rate of 7.625 percent (i.e., 3.8125 percent per period). The issue is callable by the company at par and can be converted into 48.852 shares of Bildon common stock. The bond currently sells for $965 (relative to par value of $1,000), and Bildon stock trades at $12.125 a share.a. Calculate the current conversion value for the bond. Is the conversion option embedded in this bond in the money or out of the money? Explain.b. Calculate the conversion parity price for Bildon stock that would make conversion of the bond profitable.c. Bildon does not currently pay its shareholders a dividend, having suspended these distributions six months ago. What is the payback (i.e., break-even time) for this convertible security and how should it be interpreted?d. Calculate the convertible’s current yield to maturity. If a “straight” Bildon fixed-income issue with the same cash flows would yield 9.25 percent, calculate the net value of the combined options (i.e., the issuer’s call and the investor’s conversion) embedded in the bond.

Calculate the price

Make an order in advance and get the best price

Type of paper

Academic level

Deadline

Pages (550 words)

$0.00

*Price with a welcome 15% discount applied.

Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.

We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.

How it works

Receive a 100% original paper that will pass Turnitin from a top essay writing service

step 1

Upload your instructions

Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.

step 2

Control the process

Once you place an order with our professional essay writing services, we will email you login details to your account. There, you'll communicate with the writer and support team and track the writer's progress.

step 3

Download your paper on time

As soon as your work is ready, we’ll notify you via email. You'll then be able to download it from your account and request a revision if needed. Please note that you can also rate the writer's work in your account.

Pro service tips

How to get the most out of your experience with Essay Fountain

One writer throughout the entire course

If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.

The same paper from different writers

You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."

Copy of sources used by the writer

Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.

Testimonials

See why 20k+ students have chosen us as their sole writing assistance provider

Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.

Education

Very well written thank you

Customer 452667, April 8th, 2021

Sociology

Thank you Team!

Customer 452919, April 5th, 2022

Sociology

Thanks to the Team

Customer 452919, March 22nd, 2022

History

Thank you for the revision

Customer 452919, October 31st, 2024

Sociology

Thank you

Customer 452919, February 16th, 2024

History

Thank you so much. The team is getting back to the way you all use to be!

Customer 452919, November 6th, 2024

History

Thank you

Customer 452919, October 28th, 2024

Sociology

Thanks to the entire team!

Customer 452919, December 8th, 2021

Business Studies

The writer delivered as on time with quality work. But writteres communication could of been better and I would have been more content with choosing my own writer as per my assignment.

Customer 452679, March 24th, 2021

Nursing

The second attempt was an unplagiarized paper. Thank you

Customer 452545, September 25th, 2020

Ethics

I Thank the entire team.

Customer 452919, January 25th, 2022

History

Thanking you all in advance for your assistance.

Customer 452919, November 26th, 2024

11,595

Customer reviews in total

96%

Current satisfaction rate

3 pages

Average paper length

37%

Customers referred by a friend

OUR GIFT TO YOU

15% OFF your first order

Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.

Claim my 15% OFF Order in Chat