The "floor" or pure bond value of a convertible bond is found by
A) multiplying the price of the firm's common stock by the conversion ratio.
B) multiplying the bond's conversion premium by the price of the firm's common stock.
C) multiplying the price of the firm's common stock by the conversion ratio and adding the present value of the bond's face value.
D) finding the present value of the bond's interest payments and adding the present value of the bond's face value.
Correct Answer:
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