In Which of the Following Situations Does the Value of a Convertible

question 52

Multiple Choice

In which of the following situations does the value of a convertible bond exceed the value of straight debt or equity by the greatest amount?

• A)when the price of the stock is high
• B)when the price of the stock is close to the conversion price
• C)when the price of the stock is low
• D)when the price of the stock much lower than the conversion price

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