Multiple Choice
The market value of a convertible bond will exceed the conversion value or straight bond value, whichever is greater, by an amount called the market premium. This premium exists because
A) buyers and sellers do not usually agree on the conversion value.
B) markets are efficient.
C) purchasers expect future stock price movements to be positive.
D) the straight bond value is close to the conversion value.
Correct Answer:
Verified
Correct Answer:
Verified
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