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Business, 19.03.2021 01:00 lisnel

You have been hired to value a new 25-year callable, convertible bond with a par value of $1,000. The bond has a coupon rate of 8 percent, payable annually. The conversion price is $100 and the stock currently sells for $42.10. The stock price is expected to grow at 14 percent per year. The bond is callable at $1,200; but based on prior experience, it won't be called unless the conversion value is $1,300. The required return on this bond is 8 percent. What value would you assign to this bond

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