Given an 8% annual coupon and a conversion price of $100the stock sells at $25, and there

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Given an 8% annual coupon and a conversion price of $100the stock sells at $25, and there is a forced conversion if the value is ever equal or greater than $1200,the required rate of return is 12% and the bond runs 20 years

a) Calculate the minimum price of the bond

b) If the stock grows 15% per year into perpetuity How long will it take to reach/exceed the $1200 threshold?

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Fundamentals Of Corporate Finance

ISBN: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Posted Date: Sep 05, 2023 03:35 AM

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Given an 8% annual coupon and a conversion price of $100the stock sells at $25, and there

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a To calculate the minimum price of the bond well determine the bonds value based on its cash flows and the required rate of return 12 The bond has an ... View the full answer

Fundamentals Of Corporate Finance

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