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(20%) Jimmy just purchased a Coca-Cola 30 -year convertible bond with a coupon rate of 8%. The bond has a face value of $1,000 and

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(20\%) Jimmy just purchased a Coca-Cola 30 -year convertible bond with a coupon rate of 8%. The bond has a face value of $1,000 and has a conversion ratio of 20 . Jimmy purchased the bond at issuance and paid $1,050 for the bond as interest rates had dropped slightly by the time it was issued. Similar Coca-Cola bonds without the conversion feature have a coupon rate of 9% and also currently selling for $1,050. Coca-Cola has declared a dividend of $1.50 per share for the next year and the stock price is currently $42 per share. Calculate the following at the end of one-year: a.) Coca-Cola's stock price rises to $60. Jimmy converts his bond and sells immediately. What is his return on his investment? b.) What would have been his one-year return had he invested in the ordinary bond (no conversion) and interest rates were unchanged over the course of the year? c.) What would have been his one-year return had he just invested in the stock? d.) What would the returns of these 3 investments been if the stock price had fallen to $35 and interest rates remained flat

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