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A convertible bond has a conversion ratio of 25 shares per bond, and the current price of the stock is $40 per share. Which of
A convertible bond has a conversion ratio of 25 shares per bond, and the current price of the stock is $40 per share. Which of the following most likely represents the price of the bond?
a. The convertible bond price will be less than $1000
b. The convertible bond price will be equal to $1000
c. The convertible bond price will be greater than $1000
Please explain why it is ANSWER C - greater than $1000. Thank you.
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
1st Canadian Edition
0176500693, 978-0176500696
