Sigra Co (12/12)

Good day tutor,

Could you Kindly help me on this?

Sigra Co is offering a 2% coupon bond in exchange for 16 of Dentro’s shares, which will be redeemed in 3 years at its par value of $100. Sigra Co currently has a 6% bond redeemable in three years at par which is currently trading at $104 per $100 par value.

Calculate the percentage gain on a Dentro share if this offer proceeds.

The answer used the rate of return on the 6% bond to obtain the bond value of the 2% bond. My question is, why is the rate of return on both bonds the same even though they have different maturity dates and are held by different parties? Are we just assuming they are the same because the question gives us only a limited amount of information?

Thank you in advance 🙂