20029276
Description
Quiz by Dinesh Jain, updated more than 1 year ago
|
Created by Dinesh Jain
almost 5 years ago
|
|
Question 1
Question
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?
Answer
-
100
-
95.24
-
75
-
15
Question 2
Question
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?
Answer
-
20
-
15
-
5
-
25
Question 3
Question
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?
Answer
-
20
-
15
-
100
-
10
Question 4
Question
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?
Answer
-
100
-
75
-
95.26
-
89.67
Question 5
Question
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.)?
Answer
-
0
-
10.33
-
4.76
-
25
Question 6
Question
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?
Answer
-
9.80
-
0.20
-
0.80
-
8
Question 7
Question
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?
Answer
-
No change required
-
Increase by 7%
-
Increase by 35%
-
Increase by 70%
Question 8
Question
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?
Answer
-
25 years
-
2.5 years
-
10 years
-
None of the above
Question 9
Question
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?
Answer
-
800
-
1,000
-
1,288.41
-
None of the above
Question 10
Question
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?
Answer
-
Yes
-
No
-
Investor would be indifferent on conversion
Want to create your own Quizzes for free with GoConqr? Learn more.