A 12% coupon bond has 20 years to maturity when market rates on similar non-convertible bonds are 9.25%.It is convertible into 20 common shares and has a $1,000 par value.The shares are currently trading at $40.What is the floor value of the bond,assuming it pays annual coupons?
A) $1,247
B) $1,000
C) $800
D) $2,000
Correct Answer:
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