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  3. a 10-year maturity convertible bond with a 8% annu

A 10-year maturity convertible bond with a 8% annual coupon on a company with a...

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A 10-year maturity convertible bond with a 8% annual coupon on a company with a bond rating of AAA is selling for $1,045. Each bond can be exchanged for 20 shares, and the stock price currently is $50 per share Other AAA-rated bonds with the same maturity would sell at a yield to maturity of 11%. What is the value of the implicit call option on the bond (show work for partial marke

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