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What is the implied premium over straight value

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A convertible bond with a coupon rate of 3.1% on $1,000 par, has 3-years to maturity, and is trading at $1,326.42. Coupons are paid semi-annually. Research shows that a straight bond with the same coupon rate and face value and very similar risk-profile is trading at the YTM 3.6%. What is the implied premium over straight value of this convertible bond?

Assume semi-annual compounding. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

Reference no: EM132711603

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