A Convertible Bond Has a Par Value of $1 000

question 19

Multiple Choice

A convertible bond has a par value of $1 000 but its current market price is $950. The current price of the issuing company's shares is $19 and the conversion ratio is 40 shares. The bond's conversion premium is ________.

• A)$50.00
• B)$190.00
• C)$200.00
• D)$240.00

---

Definitions:

Commission

A fee paid for provided services typically a percentage of the item sold.

Home Renters

Individuals or groups who lease living spaces from landlords or property management companies for a specified period.

Intangible

Something that cannot be touched or physically measured, often referring to abstract qualities or assets like intellectual property or brand reputation.

Gym Membership

A subscription-based service that allows access to a gym's facilities and equipment for exercising.