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Suppose a firm just issued a $1,000 par value convertible bond. Its conversion ratio is 30...

Suppose a firm just issued a $1,000 par value convertible bond. Its conversion ratio is 30 and the stock currently sells for $25 per share. Would it make better financial sense to hold onto the bond or convert it?

hold onto the bond
convert the bond
can’t tell from this information
convert the bond after two more dividend payments
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Answer #1

It makes better financial sense to hold onto the bond:-------

a)hold onto the bond

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