A $1,000 convertible bond has a discount rate of 6%. The bond pays interest annually and has 10 years to maturity. The common stock is currently selling for $18 a share. The conversion premium is 5%. What is the conversion price?
A) $17.10
B) $17.55
C) $17.90
D) $18.90
E) $18.95
Correct Answer:
Verified
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