Slater Mines Just Called Its Outstanding Bonds at a Call

question 69

Multiple Choice

Slater Mines just called its outstanding bonds at a call price of $1,025. The bonds have a conversion price of $33.33 and a par value of $1,000. The stock price is currently $33.10. In response to this call, the bondholders should ________ because ________.

• A)accept the call; the call price exceeds the conversion value
• B)accept the call; they have no other choice
• C)convert their bonds; the conversion price exceeds the par value by $37.90
• D)convert their bonds; the conversion price exceeds the call price by $12.90
• E)elect to continue holding their bonds; they want to continue receiving the interest payments

---

Definitions:

Corporate Stocks

Equity securities that represent ownership shares in a corporation, entitling holders to a share of the corporation's profits through dividends.

Implied Title

A legal concept indicating ownership rights that are not documented but assumed through one's actions or circumstances.

Sale-On-Approval Contract

A contract in which the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.

Uniform Commercial Code

An all-encompassing group of laws that regulate every aspect of commercial exchanges within the United States.