Question
The following data refers to a company's issue of convertible bonds: Maturity: 10 years Stock price: $30.00 Par value: $1,000.00 Conversion price: $35.00 Annual coupon:
The following data refers to a company's issue of convertible bonds: Maturity: 10 years Stock price: $30.00 Par value: $1,000.00 Conversion price: $35.00 Annual coupon: 5.00% Straight-debt yield: 8.00% Based on your answers to the three preceding questions, what is the minimum price (or "floor" price) at which the bonds should sell?
A. $798.70
B. $925.67
C. $999.95
D. $698.05
E. $1079.95
F. $1000.00
G. $664.50
H. $857.10
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Option Volatility And Pricing Advanced Trading Strategies And Techniques
Authors: Sheldon Natenberg
2nd Edition
0071818774, 978-0071818773
