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Conversion ratio= 50 Current stock price is 16 dollars per share. Convertible bond is currently trading at 1000. Coupon on the convertible bond is 6.0%.
Conversion ratio= 50
Current stock price is 16 dollars per share.
Convertible bond is currently trading at 1000.
Coupon on the convertible bond is 6.0%.
Straight value of bond= 800
Calculate value of the option embedded in the convertible bond
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