A 12% coupon bond has 20 years to maturity when market rates on similar non-convertible bonds are 9.25%.It is convertible into 20 common shares and has a $1,000 par value.The shares are currently trading at $40.What is the straight bond value,assuming it pays annual coupons?
A) $1,247
B) $1,000
C) $1,207
D) $1,287
Correct Answer:
Verified
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