4. A convertible bond has the following features: Coupon 5.25% Maturity June 15, 2027 Market price of

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4. A convertible bond has the following features:

Coupon 5.25%

Maturity June 15, 2027 Market price of bond $77.50 Market price of underlying common stock $28.00 Annual dividend $1.20 Conversion ratio 20.83 shares Calculate the conversion premium for this bond.

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Investments

ISBN: 9780077261450

8th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jul 24, 2024 11:01 AM

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4. A convertible bond has the following features: Coupon 5.25% Maturity June 15, 2027 Market price of

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Investments

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