Question: Calculate the following: a. The current market conversion price for the Ytel convertible bond. b. The expected one-year rate of return for the Ytel convertible

Calculate the following:
a. The current market conversion price for the Ytel convertible bond.
b. The expected one-year rate of return for the Ytel convertible bond.
c. The expected one-year rate of return for the Ytel commonequity.

Characteristic Par value Coupon (annual payment Current market price Straight bond value Conversion ratio Conversion option Dividend Expected market price in one year Convertible Bond Common Equity $1,000 4% $980 $925 25 At any time $35 per share $0 $1,125 $45 per share

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