Problem
Amka ltd has recently issued a shs.1000,9% converted bond. The bond can convert into 10 ordinary shares at the end of the 5-year period. The current market price of the shares of Amka ltd is shs.25v per share. The price is expected to grow at the rate of 10% p.a. The investors required rate of return is 12%.
Task
Compute the current value of the bond.