non-convertible debt

the first two attachments are examples the third one is the spreadsheet that need to be filled out. based on the hw below

Complete the following problems. For assistance, you may want to refer to these examples. The Excel spreadsheet shows the calculations for the problems listed in the Word document.

• Week 08 Example Problems.doc
• Week 08 Example Problems.xls.

Required:

Download the Week 08 Problems Excel spreadsheetto use in completing your problems.

1. 1. A firm has the following preferred stocks outstanding:
      • PFD A: $40 annual dividend; $1,000 par value; no maturity
      • PFD B: $95 annual dividend; $1,000 par value; maturity after twenty-five years

If comparable yields are 9 percent, what should be the price of each preferred stock?

1. Given the information below, answer the following questions.

   A convertible bond has the following features:

1. The bond may be converted into how many shares?
2. If comparable non-convertible debt offered an annual yield of 12 percent, what would be the value of this bond as debt?
3. If the stock were selling for $52, what is the value of the bond in terms of stock?
4. Would you expect the bond to sell for its value as debt (i.e., the value determined in b) if the price of the stock were $52?
5. If the price of the bond were $960, what are the premiums paid over the bond’s value as stock and its value as debt?
6. If the price of the stock were $35, what would be the minimum price of the bond?
7. What is the probability that the bond will be called when the price of the stock is $52?
8. If the price of the stock rose to $73, what would happen to the price of the bond?
9. If the price of the stock were $73, what would the investor receive if the bond were called?