Craig Supermarkets, Inc

Craig Supermarkets, Inc.has convertible debentures ($1,000 par value) that are callable at 108 percent of par value.The conversion price of the debenture is $40 per share, and the Craig common stock currently is selling at $55 a share.The company

A) could not get the convertible holders to convert if it called the debt
B) has no intention of calling the convertibles
C) could force conversion by calling the issue
D) could realize a gain of $15 a share if it called the convertibles

Correct Answer:

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