Question: 2. Given the following information concerning a convertible bond: - Coupon: 6 percent ($60 per $1,000 bond) - Exercise price: $25 - Maturity date: 20

 2. Given the following information concerning a convertible bond: - Coupon:

2. Given the following information concerning a convertible bond: - Coupon: 6 percent (\$60 per $1,000 bond) - Exercise price: $25 - Maturity date: 20 years - Call price: $1,040 - Price of the common stock: $30 a. If this bond were nonconvertible, what would be its approximate value if comparable interest rates were 9 percent? b. How many shares can the bond be converted into? c. What is the value of the bond in terms of stock? d. What is the current minimum price that the bond will command? e. Is there any reason to anticipate that the firm will call the bond? f. What do investors receive if they do not convert the bond when it is called? g. If the bond were called, would it be advantageous to convert

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