A firm issues the convertible debt shown above. The price of stock in this company on July 1, 2008 is $27.24. What is the minimum conversion ratio that would make a bondholder prefer to convert rather than accept the call price?
Coupon 0%
Call Date: July 1, 2008
Call Price 103.74%
Maturity: July 1, 2015
A) 33 shares per $1,000 principal amount
B) 36 shares per $1,000 principal amount
C) 38 shares per $1,000 principal amount
D) 42 shares per $1,000 principal amount
Answer: C
Business
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When a bond is described as AA, what does this refer to?
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