Bonhomme Co issued 5 Year $1,000 par value bonds with a 6 0 coupon rate, convertible into 25 share of Bonhomme common stock When the bonds were issued the stock traded at $30 per share Interest rates have risen to 7 0 The stock is now at $45 per share and pays a $2 00 per share quarterly dividend In the near future it is most likely that The issuing company will call the bonds and bondholders will receive common shares The bondholders will prefer to keep the bonds as they are a high value The issuing company will call the bonds and the bondholders will receive cash The bondholders will voluntarily convert their bonds to stock

Question

Bonhomme Co  issued 5 Year $1,000 par value bonds with a 6 0  coupon rate, convertible into 25 share of Bonhomme common stock  When the bonds were issued the stock traded at $30 per share  Interest rates have risen to 7 0   The stock is now at $45 per share and pays a $2 00 per share quarterly dividend  In the near future it is most likely that  The issuing company will call the bonds and bondholders will receive common shares  The bondholders will prefer to keep the bonds as they are a high value  The issuing company will call the bonds and the bondholders will receive cash  The bondholders will voluntarily convert their bonds to stock

Accepted Answer

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	The issuing company will call the bonds and bondholders will receive common shares.
	The bondholders will prefer to keep the bonds as they are a high value.
	The issuing company will call the bonds and the bondholders will receive cash.
	The bondholders will voluntarily convert their bonds to stock.

Question

Bonhomme Co. issued 5 Year $1,000 par value bonds with a 6.0% coupon rate, convertible into 25 share of Bonhomme common stock. When the bonds

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