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A Firm Issues the Convertible Debt Shown Above

Question 54

Multiple Choice

A firm issues the convertible debt shown above. The price of stock in this company on July 1, 2008 is $27.24. What is the minimum conversion ratio that would make a bondholder prefer to convert rather than accept the call price? A) 33 shares per $1,000 principal amount B) 36 shares per $1,000 principal amount C) 38 shares per $1,000 principal amount D) 42 shares per $1,000 principal amount A firm issues the convertible debt shown above. The price of stock in this company on July 1, 2008 is $27.24. What is the minimum conversion ratio that would make a bondholder prefer to convert rather than accept the call price?


A) 33 shares per $1,000 principal amount
B) 36 shares per $1,000 principal amount
C) 38 shares per $1,000 principal amount
D) 42 shares per $1,000 principal amount

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