Conversion Bond valuation Question
You have been hired to value a new 10-year callable, convertiable bond. the bond has a 5.6% coupon rate, payable annually. the conversion price is 150, and the equity sells for 44,75. the share price is expected to grow 8% per year. the bond is callable at 1100 but based on prior experince it will not be called unless the conversion value is 1200. the required return on the bond is 6%. What value would you assign the bond?
Have been stuck at this question for a while now can someone help?
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