What is the minimum value of the bond

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You have been hired to value a new 20-year callable, convertible bond. The bond has a coupon rate of 5.6 percent, payable semiannually, and its face value is $1,000. The conversion price is $75, and the stock currently sells for $62.

a. What is the minimum value of the bond? Comparable nonconvertible bonds are priced to yield 6 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Minimum value of the bond $   

b. What is the conversion premium for this bond? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Conversion premium %

Reference no: EM131938786

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