Question: For the Microsoft option prices below (prices at closing on June 4, 2023), the Risk-free rate R; -3.84. Microsoft's current stock price is $335.40;

For the Microsoft option prices below (prices at closing on June 4,

For the Microsoft option prices below (prices at closing on June 4, 2023), the Risk-free rate R; -3.84. Microsoft's current stock price is $335.40; Assume no dividends; Expiry of options December 15, 2023 (assume 190 days to expiration). Calls (Expiration: 12/20/2023); Puts (Expiration 12/20/2023) Implied Variance Strike Price 325 Intrinsic value $36.46 10.4 350 $22.04 N/A Maturity 5/2/2033 Coupon Implied Variance 2.625% 26.06 22.04 Strike Price 325 350 Intrinsic Value $16.75 N/A Microsoft is considering issuing a $10 billion face value of convertible bonds with a 10-year maturity premium of 40% on the current stock price. For the Yield to maturity of the straight bond component, use the YTM of the following MSFT bond currently trading (data as of 6/4/2023). Question: What is the value of the straight bond component? $28.90 14.6 Price (as of June 2, 2023) $96.48 16.75 14.3 Yield ?

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