Question: A company issues 2 bonds, a regular bond and convertible bond (same regular bond but has convertibility option). The regular bond has semi-annual 6% coupon

A company issues 2 bonds, a regular bond and convertible bond (same regular bond but has convertibility option). The regular bond has semi-annual 6% coupon $1,000 par, 10 years to maturity and its price is $1,010. The value of the convertible option in percent is 25 basis point. What is the price of the convertible bond to the nearest cents?

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