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Consider the following convertible bond issue from Twitter in 2014. Issuer: Twitter, Inc. Issue Date: 15 September 2014 Maturity Date: 15 September 2021 Interest: 1%
Consider the following convertible bond issue from Twitter in 2014. Issuer: Twitter, Inc. Issue Date: 15 September 2014 Maturity Date: 15 September 2021 Interest: 1% payable semi-annually, 15 March and 15 September Issue Size: $1,000,000,000 Issue Price: $1,000 Conversion Ratio: 12.8793 Share Price, 15 September 2014: $51.60 4. Suppose that, exactly 4 years later ( 15 September 2018), Twitter's stock price is now $90 and the yield to maturity on comparable Twitter nonconvertible bonds is 4%. What is the lowest possible value for this convertible bond? Explain your answer in 1-2 sentences
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