Aztec's Convertible Bonds Each Have a Face Value of $1,000

question 28

Multiple Choice

Aztec's convertible bonds each have a face value of $1,000 and a market value of $1,041.25.Each bond can be exchanged 25 shares of stock.The stock is selling for $41.54 a share.The straight bond value is $1,010.What is the option value per bond?

• A)$0
• B)$2.75
• C)$3.08
• D)$38.50
• E)$.11

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