Question: Consider the convertible bond issued by ABC Inc: Par value = $1000 Coupon = 8.5% Market price of convertible bond = $900 Conversion Ratio =

Consider the convertible bond issued by ABC Inc: Par value = $1000 Coupon = 8.5% Market price of convertible bond = $900 Conversion Ratio = 30 Estimated straight value of bond = $700 Stock price = $25 What will be the approximate return realized from investing in the convertible bond, if the investor had purchased the convertible for $900?

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