Question: You have been hired to value a new 30-year callable, convertible bond. The bond has a 3.2% coupon, payable annually, and its face value is

You have been hired to value a new 30-year callable, convertible

You have been hired to value a new 30-year callable, convertible bond. The bond has a 3.2% coupon, payable annually, and its face value is $1,000. The conversion price is $58 and the stock currently sells for $39. a. What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 4.9%. (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Minimum value of the bond $ 734.22 b. What is the conversion premium for this bond? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Conversion premium 61.81

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