What is conversion value of each convertible bond at year

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Reference no: EM13939379

The following data apply to Frye Inc.:

Frye Inc. needs to raise $30 million for its new project.

Frye Inc. is considering raising the new capital through issuing convertible bonds which will be sold at par, carry a coupon rate of 6% - annually paid, have 20-year maturity, and can be converted into 23 shares of stock.

The bonds would be non callable for 8 years, after which they would be callable at a price of $1,050.

The firms' straight nonconvertible bonds currently yields 8.5%

Frye Inc.'s stock currently sells for $32 and is expected to grow 4.7% each year

What is the conversion value of each convertible bond at Year 8?

Reference no: EM13939379

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