you buy a convertible bond, What is the YTM?
Question 3: you buy a convertible bond:
Par value EUR 10,000
Price paid EUR 11,500
Coupon 7% payable every six months
Next coupon: six months after purchase
Life to maturity 7 years
What is the YTM?
If the coupons are invested at 3% compounded every six months, what is your end capital?
What does that mean expressed as an annualized return?
Conversion is offered at 100 shares per EUR 10,000 par value.
You have held the bond for a full four years.
What price does the share price have to reach to make conversion attractive after four years.