Multiple Choice
A convertible bond has a face value of $1,000 and a conversion price of $22.50. The bond has a 6 percent coupon and pays interest semi-annually. The bond matures in six years. Similar bonds are yielding 9 percent. The current price of the stock is $23.24. What is the straight bond value?
A) $863.22
B) $865.42
C) $940.91
D) $1,000.00
E) $1,033.33
Correct Answer:
Verified
Correct Answer:
Verified
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