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A Bond with a Face Value of $1000 Is Convertible

Question 96

Multiple Choice

A bond with a face value of $1000 is convertible to common stock at a conversion ratio of 60.If the stock is currently trading at $8.20 per share,the value of the bond is probably closest in value to which of the following?


A) less than $492
B) about $492
C) about $508
D) about $1000
E) above $1666

Correct Answer:

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