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pinkmink564Lv1
29 Sep 2019
You have been hired to value a new 10-year callable, convertible bond. The bond has a coupon rate of 3.6 percent, payable semiannually, and its face value is $1,000. The conversion price is $57, and the stock currently sells for $44.
a. What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Minimum value of the bond $
b. What is the conversion premium for this bond? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Conversion premium %
| You have been hired to value a new 10-year callable, convertible bond. The bond has a coupon rate of 3.6 percent, payable semiannually, and its face value is $1,000. The conversion price is $57, and the stock currently sells for $44. |
| a. | What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) |
| Minimum value of the bond | $ |
| b. | What is the conversion premium for this bond? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Conversion premium | % |
papayaprofessorLv10
12 Oct 2022
Patrina SchowalterLv2
29 Sep 2019
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