Coupon:Conversion Ratio: 78 Shares Per $1000 Principal Amount Call Date

question 33

Multiple Choice

Coupon:Conversion Ratio: 78 shares per $1000 principal amount Call Date: 1 July 2012 Maturity: 1 July 2019 A firm issues the convertible debt shown above. The price of stock in this company on 1 July 2012 is $14.40. What is the minimum call price that would make a bondholder prefer to accept the call rather than convert?

• A) par plus 6.66%
• B) par plus 7.50%
• C) par plus 12.32%
• D) par plus 8.46%

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