A Convertible Bond Has a Par Value of $1,000 and a Current

question 98

Multiple Choice

A convertible bond has a par value of $1,000 and a current market price of $1,105. The current price of the issuing firm's stock is $20, and the conversion ratio is 35 shares. The bond's market conversion value is

• A) $700.
• B) $810.
• C) $870.
• D) $1,000.

---

Definitions:

Consumers Benefit

The advantages or utility that consumers receive from purchasing and using goods and services, typically measured in terms of satisfaction or utility gained.

Exchange Rates

The value of one currency expressed in terms of another currency.

Euros

The official currency of 19 out of the 27 European Union countries, which together make up the Eurozone.

Pounds

A unit of weight commonly used in the United States and British imperial system, equivalent to 0.453592 kilograms.