ch20混合的一些工具優(yōu)先股等-資料下載頁
2025-05-14 05:34本頁面
【正文】 the formula for the bond’s expected conversion value in any year? ? Conversion value = Ct = CR(P0)(1 + g)t. ? At t = 0, the conversion value is … C0 = 80($10)()0 = $800. ? At t = 10, the conversion value is … C10 = 80($10)()10 = $1,. 2031 What is meant by the floor value of a convertible? ? The floor value is the higher of the straight debt value and the conversion value. ? At t = 0, the floor value is $. ? Straight debt value0 = $. C0 = $800. ? At t = 10, the floor value is $1,. ? Straight debt value10 = $. C10 = $1,. ? Convertibles usually sell above floor value because convertibility has an additional value. 2032 The firm intends to force conversion when C = ($1,000) = $1,200. When is the issued expected to be called? ? We are solving for the period of time until the conversion value equals the call price. After this time, the conversion value is expected to exceed the call price. INPUTS OUTPUT N I/YR PMT PV FV 8 0 1200 800 2033 What is the convertible’s expected cost of capital to the firm, if converted in Year 5? ? Input the cash flows from the convertible bond and solve for IRR = %. 0 1 2 3 4 5 1,000 100 100 100 100 100 1,200 1,300 2034 Is the cost of the convertible consistent with the riskiness of the issue? ? To be consistent, we require that kd kc ke. ? The convertible bond’s risk is a blend of the risk of debt and equity, so kc should be between the cost of debt and equity. ? From previous information, ks = $() / $10 + = %. ? kc is between kd and ks, and is consistent. 2035 Besides cost, what other factor should be considered when using hybrid securities? ? The firm’s future needs for capital: ? Exercise of warrants brings in new equity capital without the need to retire lowcoupon debt. ? Conversion brings in no new funds, and lowcoupon debt is gone when bonds are converted. However, debt ratio is lowered, so new debt can be issued. 2036 Other issues regarding the use of hybrid securities ? Does the firm want to mit to 20 years of debt? ? Conversion removes debt, while the exercise of warrants does not. ? If stock price does not rise over time, then neither warrants nor convertibles would be exercised. Debt would remain outstanding.
環(huán)評公示相關(guān)推薦
鄂ICP備17016276號-1