Question: Given the information below, answer the following questions. A convertible bond has the following features: Principal. Value: $1000 Maturity date: 20 years Annual coupon: 8%

Given the information below, answer the following questions.

A convertible bond has the following features:

Principal. Value: $1000

Maturity date: 20 years

Annual coupon: 8%

Call price: $1050

Conversion price $65 per share

a. How many shares of stock can the bond be converted into?

b. if comparable non-comparable debt is offered at an annual yield of 12%, what is the intrinsic value of this bond?

c. When the underlying stock is selling for $52, what is the conversion value of the bond?

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