Questions from Financial Management

Q: Manpower Electric Company has 6 percent convertible bonds outstanding. Each bond

Manpower Electric Company has 6 percent convertible bonds outstanding. Each bond has a $1,000 par value. The conversion ratio is 20, the stock price $36, and the bonds mature in 16 years. a. What is t...

Q: The warrants of Integra Life Sciences allow the holder to buy a

The warrants of Integra Life Sciences allow the holder to buy a share of stock at $11.75 and are selling for $2.85. The stock price is currently $8.50. To what price must the stock go for the warrant...

Q: The warrants of Dragon Pet Co. allow the holder to buy

The warrants of Dragon Pet Co. allow the holder to buy a share of stock at $26.20 and are selling for $14.10. The stock price is currently $23.50. To what price must the stock go for the warrant purch...

Q: O’Reilly Moving Company has a $1,000 par value convertible

O’Reilly Moving Company has a $1,000 par value convertible bond outstanding that can be converted into 20 shares of common stock. The common stock is currently selling for $43.10 a share, and the conv...

Q: The bonds of Goniff Bank & Trust have a conversion premium of

The bonds of Goniff Bank & Trust have a conversion premium of $90. Their conversion price is $20. The common stock price is $16.50. What is the price of the convertible bonds?

Q: The bonds of Generic Labs Inc. have a conversion premium of

The bonds of Generic Labs Inc. have a conversion premium of $70. Their conversion price is $25. The common stock price is $22.50. What is the price of the convertible bond?

Q: Sherwood Forest Products has a convertible bond quoted on the NYSE bond

Sherwood Forest Products has a convertible bond quoted on the NYSE bond market at 90. (Bond quotes represent the percentage of par value. Thus 70 represents $700, 80 represents $800, and so on.) It ma...

Q: The Clark Corporation desires to expand. It is considering a cash

The Clark Corporation desires to expand. It is considering a cash purchase of Kent Enterprises for $3 million. Kent has a $700,000 tax loss carryforward that could be used immediately by the Clark Cor...

Q: Chicago Savings Corp. is planning to make an offer for Ernie’s

Chicago Savings Corp. is planning to make an offer for Ernie’s Bank & Trust. The stock of Ernie’s Bank & Trust is currently selling for $44 a share. a. If the tender offer is planned at a premium of 5...

Q: Discuss the benefits accruing to a company that is traded in the

Discuss the benefits accruing to a company that is traded in the public securities markets.