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Assume that Chen Inc. has issued a BB-rated convertible bond with an annual coupon of 4%, a par value of $1000 and 12 years to

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Assume that Chen Inc. has issued a BB-rated convertible bond with an annual coupon of 4%, a par value of $1000 and 12 years to maturity. Nonconvertible BB-rated bonds of this maturity have a yield of 6%. The bond has a conversion ratio of 20 and the firm's shares are currently trading at $41.5. The price of the Chen bond in the prior questions will be influenced by: 1. Shifts in interest rates II. Shifts in the firm's stock price O I only O Il only I and II None of the above

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