What is the conversion premium for this bond

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Question - A convertible bond has a face value of $1,000 and a conversion price of $22.50. The bond has a 6 percent coupon and pays interest semi-annually. The bond matures in six years. Similar bonds are yielding 7 percent. The current price of the stock is $21.24.

1) What is the straight bond value?

2) What is the conversion ratio?

3) What is the conversion value?

4) What is the minimum value of the bond?

5) What is the conversion premium for this bond?

Reference no: EM132923459

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