Question #39
Reading: Reading 27 Valuation and Analysis of Bonds With Embedded Options - Anwers
PDF File: Reading 27 Valuation and Analysis of Bonds With Embedded Options - Anwers.pdf
Page: 15
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Question
Suppose the market price of a convertible security is $1,050 and the conversion ratio is 26.64. What is the market conversion price?
Answer Choices:
A. $1,050.00
B. $26.64
C. $39.41. Explanation The market conversion price is computed as follows: Market conversion price = market price of convertible security/conversion ratio = $1,050/26.64 = $39.41 (Module 27.8, LOS 27.o)
No explanation available for this question.