Valuation of Convertible Instruments

Beschreibung

Chartered Accountancy Strategic Financial Management Quiz am Valuation of Convertible Instruments, erstellt von Dinesh Jain am 01/11/2019.
Dinesh  Jain
Quiz von Dinesh Jain, aktualisiert more than 1 year ago
Dinesh  Jain
Erstellt von Dinesh Jain vor mehr als 4 Jahre
373
0

Zusammenfassung der Ressource

Frage 1

Frage
Face value of bond = Rs.100; Rate of interest on bond = 8%; Return on similar bonds = 9.5%. Term = 4 years. Bond is convertible into 5 shares. CMP of equity share = 15. What is bond's conversion value?
Antworten
  • 100
  • 95.24
  • 75
  • 15

Frage 2

Frage
Face value of bond = Rs.100; CMP of bond = Rs.100 Rate of interest on bond = 8%; Return on similar bonds = 9.5%. Term = 4 years. Bond is convertible into 5 shares. CMP of equity share = 15. What is bond's conversion premium per share?
Antworten
  • 20
  • 15
  • 5
  • 25

Frage 3

Frage
Face value of bond = Rs.100; CMP of bond = Rs.100; Rate of interest on bond = 8%; Return on similar bonds = 9.5%. Term = 4 years. Bond is convertible into 5 shares. CMP of equity share = 15. What is conversion parity price?
Antworten
  • 20
  • 15
  • 100
  • 10

Frage 4

Frage
Face value of bond = Rs.100; Rate of interest on bond = 8%; Return on similar bonds = 9.5%. Term = 4 years. Bond is convertible into 5 shares. CMP of equity share = 15. What is bond's straight value?
Antworten
  • 100
  • 75
  • 95.26
  • 89.67

Frage 5

Frage
Face value of bond = Rs.100; CMP of bond = Rs.100; Rate of interest on bond = 8%; Return on similar bonds = 9.5%. Term = 4 years. Bond is convertible into 5 shares. CMP of equity share = 15. What is downside risk (in Rs.)?
Antworten
  • 0
  • 10.33
  • 4.76
  • 25

Frage 6

Frage
Face value of bond = Rs.100; Interest rate on bond = 10%. Bond is convertible into 10 shares. Likely dividend per share is Rs.0.2. What is favorable income differential per share?
Antworten
  • 9.80
  • 0.20
  • 0.80
  • 8

Frage 7

Frage
Existing EPS = Rs.2; Existing no of shares = 1,00,000. Company plans to issue 7% preference capital of Rs.10,00,000. What should be the increase in earnings post preference issue to maintain EPS?
Antworten
  • No change required
  • Increase by 7%
  • Increase by 35%
  • Increase by 70%

Frage 8

Frage
Conversion premium per bond = Rs.100. One bond is convertible into 10 shares. Favorable income differential per share = Rs.4. How much is the premium payback period?
Antworten
  • 25 years
  • 2.5 years
  • 10 years
  • None of the above

Frage 9

Frage
Face value = Rs.1,000; Rate of interest = 10%. The bond is convertible into 10 equity shares whose current market price is Rs.80. Growth rate in equity share is 10%. What will be the terminal cash flow at end of year 5?
Antworten
  • 800
  • 1,000
  • 1,288.41
  • None of the above

Frage 10

Frage
CMP of bond = Rs.1,200. One bond is convertible into 10 shares. CMP of share is Rs.125. Should the investor opt for conversion?
Antworten
  • Yes
  • No
  • Investor would be indifferent on conversion
Zusammenfassung anzeigen Zusammenfassung ausblenden

ähnlicher Inhalt

Walter's and Gordon's Model
Dinesh Jain
Historische Fakten des 20. Jahrhunderts
AntonS
DNA - Struktur
Lisa10a
Checkfragen - Kapitel 1: Empirische Sozialforschung und empirische Theorie
Melanie Najm
Essay schreiben - Tipps
AntonS
Sächsisch Quiz
tanja.goldbecher
Unsere Erde - Sonnensystem, Klima, Erdschichten etc.
rezension1
Anfänge der Weimarer Republik
Milena Märker
Vetie: Virofragen 2015
Johanna Tr
Vetie - Pharma 2018
Fioras Hu
GESKO A PR WS 2018/19
Caroline Hannah