ABC Corporation Has a $1,000 Par Value, 6% Coupon Callable

ABC Corporation has a $1,000 par value, 6% coupon callable convertible bond quoted with a price of 108. The conversion ratio is 12.5. This bond matures in 20 years. The common stock is currently trading at $79.50. The call price is 106. Comparable non-convertible and non-callable bonds sell for 92.


-The market price premium of this callable convertible bond is

A) 7.89%
B) 9.57%
C) 8.68%
D) 10.03%
E) 6.00%