Answer:
Conversion value = $980
Explanation:
A convertible bond is that which gives the holder the option of converting the bonds to pre-determined number of ordinary shares at a particular time in future.
When faced with these options , a rational investor who maximizes return would opt for the option with the higher value.
Hence, we would compare the conversion value and the bond price
The conversion value would be the higher of the value of shares on conversion and the current price of the bond,
The conversion value can be worked as follows:
C= Price of share × Number of shares
C= $28× 35 = $980
Price of Bond =$975
A rational investor would convert.
Conversion value = $980
The answer to this is microprocessors. Hope this helps :D
If you were in the dry cleaning business you would benchmark the business itself for their technological innovations
The transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country for the following reason which is,
b. Devaluation of the country's currency
Explanation:
- In devaluation of the country's currency, the monetary authority formally gets a lower exchange rate out of the national currency in contrast to the foreign currency's reference.
- Company which transports medical equipment to emerging nations, which conducts a political risk analysis before signing a contract to transport equipment within a South American country, findings in the political risk analysis would indicate that the company should NOT sign the contract because of the Devaluation of the country's currency.
- A country devalues its currency can impact on its deficit because of the high demand of cheaper exports.
- Countries uses it devaluation of currencies as to achieve economic policy.
- The weaker currency compare to the rest of the world can really increase exports, reduce trade deficits and also reduce the cost of interest payments.