Business, 23.03.2021 01:20, samueladetoro54

A French corporation issued a convertible bond in May. 2017, due May. 15, 2029 (12 years). It has a coupon of 5%, paid annually. The bond, with a par value of $1,000, is convertible into 40 shares of common stock. Investors paid par value for the bonds, and the price is unchanged. If this company were to issue a straight (non-convertible) bond, it would have had to pay a yield of 11%. The current stock price is $21 per share, and the stock pays an annual dividend of $0.50 per share. From the point of view of the investor, what is the breakeven (years) between buying the stock, and buying the convertible bond

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A French corporation issued a convertible bond in May. 2017, due May. 15, 2029 (12 years). It has a...