Question
The common stock of Bike Tours, Inc. pays no dividend, and has a market price of $80 per share. Bike Tours' 8% ($80 annual coupon)
The common stock of Bike Tours, Inc. pays no dividend, and has a market price of $80 per share. Bike Tours' 8% ($80 annual coupon) convertible bond sells at 128% of the par value ($1280), and is convertible into common at a stock price of $100 per share. The conversion premium for Bike Tours' convertible bond is __________.
| A. $1000 |
| B. $280 |
| C. $800 |
| D. $480 |
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Cases in Finance
Authors: Jim DeMello
3rd edition
1259330476, 1259330478, 9781259352652 , 978-1259330476
