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Aztec's Convertible Bonds Each Have a Face Value of $1,000

Question 28

Multiple Choice

Aztec's convertible bonds each have a face value of $1,000 and a market value of $1,041.25.Each bond can be exchanged 25 shares of stock.The stock is selling for $41.54 a share.The straight bond value is $1,010.What is the option value per bond?


A) $0
B) $2.75
C) $3.08
D) $38.50
E) $.11

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