A convertible bond has a face value of $5,000 and a conversion price of $80.The bond has a 6 percent coupon,pays interest semi-annually,and matures in 12 years.Similar bonds are yielding 7.5 percent.The current price of the stock is $42 per share.What is the conversion value of this bond?
A) $1,680
B) $2,575
C) $2,625
D) $4,651
E) $5,000
Correct Answer:
Verified
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