Concerning Convertible Bonds, Which of the Following Statements Is Not

question 30

Multiple Choice

Concerning convertible bonds, which of the following statements is not correct?

• A)The value of a convertible bond will generally be greater than its straight bond value.
• B)The value of a convertible bond will generally be greater than its conversion value.
• C)The difference between the conversion value and the straight bond value is the conversion or option premium.
• D)The coupon rate on a nonconvertible bond will generally exceed the coupon rate on an otherwise identical convertible bond.
• E)All of the above are correct.

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