Multiple Choice
A convertible bond is selling for €800.It has 10 years to maturity,a €1,000 face value,and a 10% coupon.Similar nonconvertible bonds are priced to yield 14%.The conversion price is €50 per share.The equity currently sells for €31.375 per share.The conversion premium is:
A) 37.25%.
B) 43.33%.
C) 59.36%.
D) 66.67%.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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