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Find the market value of the bond

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Problem - A $1,000 3% convertible and callable corporate bond with exactly 10 years to maturity is currently trading to yield -0.3% (negative yield). Currently, the market value of the bond exceeds its conversion value by $70. The issuer announces the bond will be called at a call price of 130 and simultaneously the market value of the issuer's common stock decreases by 1%. Find the market value of the bond following the announcement.

Reference no: EM132935021

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