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A(n) 9% convertible bond carries a par value of $1,000 and a conversion ratio of 18. Assume that an investor has $5,000 to invest and

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A(n) 9% convertible bond carries a par value of $1,000 and a conversion ratio of 18. Assume that an investor has $5,000 to invest and that the convertible sells at a price of $1,000 (which includes a 24% conversion premium). How much total income (coupon plus capital gains) will this investment offer if, over the course of the next 12 months, the price of the stock moves to $75.92 per share and the convertible trades at a price that includes a conversion premium of 9%? What is the holding period return on this investment? Finally, given the information in the problem, determine what the underlying common stock is currently selling for. The total income (coupon plus capital gains) this investment will offer is $ . (Round to the nearest cent.) The holding period return on this investment is %. (Round to two decimal places.) The price that the underlying common stock currently selling for is $ . (Round to the nearest cent.)

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