Hav Co (june 13)

Part(c)

Cash and bond offer: premium % to Strand Co shareholder

Each share has nominal value of $0.25 so $5 is 20 shares (i didn’t understand this part)
Bond value $100/20 shares = $5 per share
Cash payment per Strand Co share = $1.25
Total return = 5 + 1.25 = $6.25
Premium = (6.25 – 4.77)/4.77 × 100 = 31.0%

And one more thing this convertible bond do we have in course , or can we get an exam question under convertible bond.