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 stock 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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