Question: *Show work step by step * 1. You own a convertible bond that pays annually, has a 4% yield, 7.5% coupon rate, and matures in

*Show work step by step*

1. You own a convertible bond that pays annually, has a 4% yield, 7.5% coupon rate, and matures in 10 years. The conversion ratio is 20. The stock price is $43. What is your gain or loss if you convert? What is the minimum stock price to convert this bond?

Answer: loss of 423.88 / convert if stock price is greater than 64.19

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