Camtech has bonds outstanding that have $1,000 par value and are convertible into the companys common stock at $240 per stock. The convertibles have annual coupon rate of 9% and mature in 15 years. Straight debt of equivalent risk is yielding 8%. The companys common stock is selling at $255 per share.

Determine the conversion value of the issue.

$863.35

$963.35

$1,063.35

$1,163.35

Determine the straight-bond value of the issue

$1,185.59

$1,085.59

$985.59

$885.59

Investors should convert their bonds into Camtechs stocks.

True

False

Determine the minimum stock price at which the investors are better off converting their bonds.

$160.33

$210.33

$260.33

$310.33