If a $1,000 Convertible Bond Has a Conversion Ratio of 50

question 33

Multiple Choice

If a $1,000 convertible bond has a conversion ratio of 50 and the firm's equity is currently selling for $22 per share, then the:

• A)Bond should trade for $900
• B)Bond should trade for $1,000
• C)Bond should trade for $1,100
• D)Firm will have already converted the bond

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