A convertible bond has a 5 percent semi-annual coupon and a


A convertible bond has a 5 percent, semi-annual coupon and a conversion ratio of 35. The bond has a face value of $1,000 and matures in 18 years. The current yield to maturity is 4.9 percent. Assume that you buy this bond today and sell it one year from now when the yield to maturity is 5.05 percent and the stock price is $28.10. What will your holding period return be?

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Financial Management: A convertible bond has a 5 percent semi-annual coupon and a
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