Question
You own a $1,000 face value convertible. Microsoft bond that is currently trading at a price of $1,100. The bond has a conversion ratio of
You own a $1,000 face value convertible. Microsoft bond that is currently trading at a price of $1,100. The bond has a conversion ratio of 20 and Microsoft stock is currently trading at $54 per share. Assuming you are liquidating your position, which option would be more profitable?
Sell the bond
Convert the bond and sell the stock
OR
None of the options
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Principles Of Managerial Finance
Authors: Lawrence J Gitman, Chad J Zutter
7th Edition
0133546403, 9780133546408
