A Convertible Bond Has a Par Value of $1,000 and a Current

question 98

Multiple Choice

A convertible bond has a par value of $1,000 and a current market price of $1,105. The current price of the issuing firm's stock is $20, and the conversion ratio is 35 shares. The bond's market conversion value is

• A) $700.
• B) $810.
• C) $870.
• D) $1,000.

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