The value that would be given to a convertible bond if it were converted into a comparable straight bond is called the bond's _________ value. This value is also known as floor value.

Question

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The value that would be given to a convertible bond if it were converted into a comparable straight bond is called the bond's intrinsic value or floor value. This value represents the minimum value that the convertible bond would have because it is always worth at least as much as the equivalent straight bond.

The Value That Would Be Given to a Convertible Bond