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

question 62

Multiple Choice

A convertible bond has a par value of $1,000 and a current market value of $1,150. The current price of the issuing firm's stock is $65, and the conversion ratio is 15 shares. The bond's conversion premium is

• A) $40.
• B) $150.
• C) $175.
• D) $200.

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