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You have been hired to value a new 20-year callable, convertible bond. The bond has a...

You have been hired to value a new 20-year callable, convertible bond. The bond has a coupon rate of 5.5 percent, payable annually. The conversion price is $97 and the stock currently sells for $39.10. The stock price is expected to grow at 11 percent per year. The bond is callable at $1,300; but based on prior experience, it won't be called unless the conversion value is $1,400. The required return on this bond is 8 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.)

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago
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