Tangshan Mining Company Has an Outstanding Issue of Convertible Bonds

question 138

Multiple Choice

Tangshan Mining Company has an outstanding issue of convertible bonds with a $1,000 par value. The bonds have a 10 percent coupon rate, have a 10-year maturity, and are convertible into 100 shares of common stock. The yield to maturity on bonds of similar risk is 10 percent and the market price of the firm's common stock is currently $15.00. Based on this information, the conversion value of the bond is

• A) $1,000.00.
• B) $1,500.00.
• C) $750.00.
• D) none of the above.

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Definitions:

Distorted Cognitions

Refers to inaccurate or misleading thoughts, beliefs, or interpretations that can lead to emotional distress and maladaptive behaviors.

Beck

Refers to Aaron T. Beck, an influential psychiatrist known for developing cognitive therapy (now known as cognitive-behavioral therapy, CBT).

Bi-polar Disorder

A mental health condition characterized by extreme mood swings that include emotional highs (mania or hypomania) and lows (depression).

Core/Basic Belief

A fundamental or underlying principle or idea that is deeply believed or ingrained in a person's or society's mindset.