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What is the floor price of a convertible bond at the end

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Reference no: EM132764552

Problem 1: What is the floor price of a convertible bond at the end of year 4?

10 year convertible, annual bond

Par-bond with face value of $1,000

Annual coupon rate is 10% and each bond can be converted to 15 common stocks

Yield of simian-non convertible bond is 12.5%

Stock Price is $50 with constant dividend growth rate of 3%

Reference no: EM132764552

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