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20 -year, 10% annual coupon, callable convertible bond will sell at its $1,000 par value; straight-debt issue would require a 12% coupon. Call the bonds
20 -year, 10% annual coupon, callable convertible bond will sell at its $1,000 par value; straight-debt issue would require a 12% coupon. Call the bonds when conversion value >$1,200. P0=$10;D0=$0.74;g=10%. Conversion ratio =CR=80 shares. What is the value of bond at year 5 ? A$864 B) $1250 C) $1288 D) $1195 E) $1550 A B C D E
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