Calculate the conversion premium for this bond

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Reference no: EM131901915

1) A convertible bond has the following features:

Coupon	7.25%
Maturity	June 15, 2020
Market price of bond	$83.00
Market price of underlying common stock	$38.00
Annual dividend	$1.20
Conversion ratio	18.50 shares

Calculate the conversion premium for this bond.

2) Find the duration of a 6% coupon bond making annual coupon payments if it has two years until maturity and a yield to maturity of 7%.

Reference no: EM131901915

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