What Happens in the Case of a Bond Selling for $1,000

question 19

Multiple Choice

What happens in the case of a bond selling for $1,000 that can be converted to 20 shares of stock that are currently selling for $55 per share?

• A) The bondholder will lose $100.
• B) The stock will go down to $50 per share.
• C) The bond's price will go down to $900.
• D)The bondholder will choose to convert.