The following facts are available about a convertible bond: Market Price of issuer's common stock = S

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The following facts are available about a convertible bond: Market Price of issuer's

common stock = S = 100, uS = 110, dS = 90,

Interest Rate = 3%,

Face Value of a Convertible Bond (E) = 1,000.

Using the One Period Binomial Model to create a replicating portfolio, calculate the price of this convertible bond.

Related Book For answer-question

Engineering Economics

ISBN: 9780195168075

4th Edition

Authors: Ted G. Feller

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Posted Date: Apr 06, 2022 08:01 AM

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The following facts are available about a convertible bond: Market Price of issuer's common stock = S

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