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What is the convertible bond price

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Reference no: EM132171851

You are interested in buying ABC Company's securities. You can buy common stock at $40 per share. This stock pays $0.8 dividends per share. You can also buy a 7% annual coupon convertible bond maturing in 15 years that has a conversion ratio of 20. The convertible bond price is quoted at 92.50.

1. What is the convertible bond price?

2. What is the conversion value of the bond?

3. What is the conversion price of the stock (conversion parity)?

Reference no: EM132171851

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