Value of the implicit call option on the bond

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A 13-year maturity convertible bond with a 6% annual coupon on a company with a bond rating of AAA is selling for $1,045. Each bond can be exchanged for 50 shares, and the stock price currently is $20 per share. Other AAA-rated bonds with the same maturity would sell at a yield to maturity of 10%. What is the value of the implicit call option on the bond?

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Reference no: EM133112596

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