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Consider the convertible bond by Smith Co.: Par Value Coupon Rate Market price of convertible bond Conversion ratio $1,000 8.5% $900 30 Assume that the

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Consider the convertible bond by Smith Co.: Par Value Coupon Rate Market price of convertible bond Conversion ratio $1,000 8.5% $900 30 Assume that the price of Smith Co. common stock is $25 and that the dividend per share is $1 per annum. a) What is the conversion value and market conversion price? (3 marks) b) Calculate the conversion premium per share and conversion premium ratio

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