A convertible bond has a face value of $1000 and a conversion ratio of 50.This bond will sell at a premium when which of the following occurs?
A) When market rates fall below the bond's coupon rate.
B) When the firm's stock sells for more than $20 per share.
C) When market rates rise above the bond's coupon rate.
D) A and C.
Correct Answer:
Verified
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