Suppose a Firm Just Issued a $1,000 Par Value Convertible

question 144

Multiple Choice

Suppose a firm just issued a $1,000 par value convertible bond. Its conversion ratio is 30 and the stock currently sells for $25 per share. Would it make better financial sense to hold onto the bond or convert it?

• A) hold onto the bond
• B) convert the bond
• C) can't tell from this information
• D) convert the bond after two more dividend payments

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