Four years ago, Microsoft issued 10-year semi-annual bonds that pay an annual rate of 3.5% and face value of $1,000. They are convertible at any time into 4 shares of common stock. What is the market price of the bonds if the yield to maturity is 2.5% and the common shares are trading at $245 per share?

Answer rating: 100% (QA)

To calculate the price of the bond we need to discount the future cash flows interest payments and p... View the full answer