Question
You have been hired to value a new 15-year callable, convertible bond. The bond has a 5 percent coupon, payable semi-annually, and its face value
| You have been hired to value a new 15-year callable, convertible bond. The bond has a 5 percent coupon, payable semi-annually, and its face value is $1,000. The conversion price is $55, and the stock currently sells for $40. |
| What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 11 percent. |
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
13th edition
978-1-119-4110, 1119411483, 9781119411017, 978-1119411482
