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1. A 8.3% redeemable loan note in ATV Co is due to mature in 3 years time at a premium of 14%, or convertible into 26 ordinary shares at that point. The current share price is $4.06, expected to grow at 11% per annum.
ATV pays corporation tax at a rate of 26%.
What is the current market value of the loan note if loan note holders require a 10% return?
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