Seal Island (6/10) – debt market value

Hi John,

In the part c of this question, when the loan stock is not converted into shares, why do we have to recalculate the market price of the loan stock? The question already give the current market price of the loan stock is $110 and we should use this market value instead, why not?

Also, can you let me know which lecture video refer to how to calculate market value of convertible debt? In this question, if I calculate the YTM of the convertible loan stock using the market price 110 using extrapolation, I will get YTM at 5.5% instead of the 9% redemption yield.

Thank you