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38)You have been hired to value a new 24-year callable-convertible bond. The bond has a 3% coupon, payable annually, and its face value is $1,000.

38)You have been hired to value a new 24-year callable-convertible bond. The bond has a 3% coupon, payable annually, and its face value is $1,000. The conversion price is $40 and the stock currently sells for $28. Calculate the minimum value of the bond. Comparable nonconvertible bonds are priced to yield 5%.

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