Question 1
The advantage of a convertible bond to the investor is
◦ higher coupon interest rates.
◦ ability to "own the upside" if the company performs well.
◦ convertibility protects the investor if the stock decreases in value.
◦ none of these are advantages.
Question 2
You own a $1,000 par value convertible bond with a 6% coupon rate. The bond is convertible into 20 shares of stock at the investor's discretion. The stock price has reached $51 per share with a $1 per share annual dividend, but you do not forecast any further price appreciation in the stock. Should you make the conversion?
◦ No, 20 shares of stock are not worth $1,000.
◦ Yes, since the stock is worth $51 per share it is worth more than the bond.
◦ No, the total stock is only worth $20 more than the bond, and you would lose $40 in annual cash flow based on the coupon rate versus the dividend.
◦ Yes, while the stock is only worth $20 more in total than the bond, you will receive an annual $1 per share dividend.
Effects of growth rate on development.
Peptide bond formation
Formation of phosphodiester bond
Hydrogen bond
Factors that Influence Pulse Rate
Catalysis of peptide bond hydrolysis by chymotrypsin (part 1)