Assuming that this advice is correct what is the value of


Volvo has been advised that it can issue 10-year straight debt at a yield of 6.5% (annual). Instead, the company could issue a comparable maturity convertible bond at par with a coupon of 4.5% (annual). Assuming that this advice is correct, what is the value of the conversion option implied?

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Financial Management: Assuming that this advice is correct what is the value of
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