Multiple Choice
A bond with a face value of $5,000 can be exchanged for 70 shares of stock.The bond has a coupon rate of 6.5 percent which equals the market rate of interest.Assume the option premium is $50.What is the market value of the bond if the stock is selling for $68.90 a share and the bond matures in exactly one year?
A) $4,744.84
B) $4,873.00
C) $5,000.00
D) $4,940.00
E) $5,050.00
Correct Answer:
Verified
Correct Answer:
Verified
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