What value would you assign to this bond

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You have been hired to value a new 25-year callable, convertible bond, with a $1,000 par value. The bond has a coupon rate of 5.1 percent, payable annually. The conversion price is $93, and the stock currently sells for $35.10. The stock price is expected to grow at 12 percent per year. The bond is callable at $1,200, but, based on prior experience, it won't be called unless the conversion value is $1,300. The required return on this bond is 9 percent.

What value would you assign to this bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM132707415

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