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You are a financial analyst hired to value a new 20-year callable, convertible bond. the bond has8% coupon payable annually. the conversion price is 120 the stock currently sells for 1000.the stock price is expected to rise by 15% per year. The bond is callable at 1000.the required return on bond is 12%

Calculate the straight bond value

Calculate the conversion value

How long would it take for the conversion value to exceed a call price?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92854999

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