A Firm Issues the Convertible Debt Shown Above

Multiple Choice

A firm issues the convertible debt shown above. The price of stock in this company on July 1, 2008 is $4.70. If the bonds are called on this date, which of the following is the action most likely to be taken by a holder of bond of face value of $10,000?

A) Convert the bond and accept shares with a value of $10,000.
B) Convert the bond and accept shares with a value of $9599.75.
C) Convert the bond and accept shares with a value of $10,105.00.
D) Accept the call price and receive $10,000.