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You have been hired to value a new 2 5 - year, callable, convertible bond. The bond has a 5 . 8 0 percent coupon

You have been hired to value a new 25-year, callable, convertible bond. The bond has a 5.80 percent coupon rate, payable annually. The conversion price is $161, and the stock currently sells for $46.50. The stock price is expected to grow at 13 percent per year. The bond is callable at $1,260, but based on prior experience, it wont be called unless the conversion value is $1,360. The required return on this bond is 10 percent. What value would you assign to this bond?

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