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A Convertible Bond Has a Par Value of $1,000 and a Current

Question 6

Multiple Choice

A convertible bond has a par value of $1,000 and a current market value of $850.The current price of the issuing firm's stock is $27 and the conversion ratio is 30 shares.The bond's conversion premium is _________.


A) $40
B) $150
C) $190
D) $200
E) none of these

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