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You are considering investing $800. You can buy common stock at $25 per share; this stock pays no dividends. You can also buy a convertible
You are considering investing $800. You can buy common stock at $25 per share; this stock pays no dividends. You can also buy a convertible bond ($1000 par value) that is currently trading at $790 and has a conversion ratio of 30. it pays $40 per year in interest. If you expect the price of the stock to rise to $33 per share in one year, which investment should you purchase?
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