The following facts apply to a convertible bond making semiannual payments: Conversion price $ 39 /share Coupon rate 2.8 % Par value $ 1,000 Yield on nonconvertible
The following facts apply to a convertible bond making semiannual payments:
Conversion price $ 39 /share
Coupon rate 2.8 %
Par value $ 1,000
Yield on nonconvertible debentures of same quality 3 %
Maturity 20 years
Market price of stock $ 38 /share
——————————————————————————–
a.
What is the minimum price at which the convertible should sell? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
