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Question
Neuman Corporation Convertible Bonds
The following data apply to Neuman Corporation's convertible bonds:
Maturity: 10 Stock price: $30.00
Par value: $1,000.00 Conversion price: $35.00
Annual coupon: 5.00% Straight-debt yield: 8.00%
Refer to the data for the Neuman Corporation's convertible bonds. What is the bond's straight-debt value?a. $684.78
b. $720.82
c. $758.76
d. $798.70
e. $838.63
Answer
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