What Is the Value of a Convertible Bond with a Conversion

question 1

Multiple Choice

What is the value of a convertible bond with a conversion ratio of 25, face value of $1,000, coupon of 10% and yield of 10 percent? Common stock of this firm is currently selling at $35.

• A)$875
• B)$1,000
• C)$1,125
• D)$1,875

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