Wayne, Inc. stock is $40.00 per share. The company's quarterly dividend is forecasted as $0.45 per share, indefinitely. A coupon equity-linked bond,
promising to pay one share of Wayne, Inc. in 3 years pays a quarterly coupon of $0.50. If annual interest rates are 4.0%, what is the price of the bond?
A)
$40.56
B)
$42.60
C)
$44.56
D)
$46.60
Answer:
A
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