Scott Corp. issued a 25 year bond with par value of $1,000
January 1st, 2018
7. Scott Corp. issued a 25 year bond with par value of $1,000 and coupon rate of 9% on July 1,1990. The bond was sold at 98 on July 1, 1990, and interest was paid semiannually.a.Find the YTM of the bond on July 1,1990. b.If you purchased the bond on January 1, 2008 and expected to earn 8% return on this investment, what’s the price you were willing to pay? c. Find the YTM if you purchased the bond at 105 on July 1. d. If the bond could be converted into 30 shares of the company’s common stock on January 1, 2006. On the conversion date the stock price was $35 per share. Assuming the bond investor’s expected return was 8%. Should the bond investor converted the bond into common stock? Explain.