You Own a Bond That Has a Face Value of $1,000

question 107

Multiple Choice

You own a bond that has a face value of $1,000 and a conversion ratio of 26.You have just received notification that the bond is being called at a premium of $40.The stock price is $41.20 a share.You should _____ your bond because the conversion value is _____.

• A)convert; less than the call price by $40.00
• B)convert; greater than the call price by $31.20
• C)convert; greater than the call price by $4.75
• D)not convert; less than the call price by $31.20
• E)not convert; greater than the call price by $40.00

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The action of deactivating an alarm system or an alarm clock to stop it from making noise or to prevent it from going off at a scheduled time.

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