Kurt Owns a Convertible Bond That Matures in Three Years

question 88

Multiple Choice

Kurt owns a convertible bond that matures in three years.The bond has an 8 percent coupon and pays interest semi-annually.The face value of the bond is $1,000 and the conversion price is $25.Similar bonds have a market return of 9.25 percent.The current price of the stock is $26.50 per share.What is the straight bond value?

• A)$948.20
• B)$967.89
• C)$972.80
• D)$987.78
• E)$991.15

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Definitions:

Self-Awareness

Being aware of one's own identity, sentiments, intentions, and aspirations.

Long-Term Goals

Objectives or targets that an individual or organization aims to achieve over an extended period, often requiring considerable time and effort.

Self-Regulation

The method through which people regulate their actions, feelings, and cognitions to attain extended objectives.

Incremental Theorists

Individuals who believe that abilities and intelligence can grow and improve over time through effort and learning.