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A firm currently has outstanding a 5 percent, $1,000 convertible bond. The bond is convertible into ...

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A firm currently has outstanding a 5 percent, $1,000 convertible bond. The bond is convertible into ...

A firm currently has outstanding a 5 percent, $1,000 convertible bond. The bond is convertible into 25 shares of common stock and callable at $1,050. The current market price of the firm's stock is $41 per share. The bond holder will ________.
A) allow the call to be exercised
B) convert the bond into stock
C) sell the bond on the secondary market
D) do nothing and wait until the stock price goes up further

Textbook

Principles of Managerial Finance

Edition: 14^th

Authors: Gitman, Zutter

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pompa Author

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This helped my grade so much Perfect

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Correct

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