Question

A convertible bond can never sell for more than its conversion value or less than its...

A convertible bond can never sell for more than its conversion value or less than its bond value.

True

False

Homework Answers

Answer #1

  

_______________________________

_______________________________

A convertible bond can never sell for more than its conversion value or less than its bond value.

The given statement is false, as it depends on the demand and supply and a Bond can trade more than its conversion value or less than it Bond value,

Answer = FALSE.

NOTE: Do upvote the answer, if this was helpful.

NOTE: Please don't downvote directly. In case of query, I will solve it in comment section in no time.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1/ If a $1,000 par value convertible bond has a conversion ratio of 1 bond to...
1/ If a $1,000 par value convertible bond has a conversion ratio of 1 bond to 70 shares, the bond conversion price is $14.29. True False 2/ A conversion premium is ultimately the additional amount given up to convert the bond to stock. True False 3/ Forced conversion refers to the corporation calling a convertible bond. This is ideal when the market price of the stock is above the conversion price by more than a small percentage. True False 4/...
A project’s PI can be less than 1, but never less than 0. True/False, why?
A project’s PI can be less than 1, but never less than 0. True/False, why?
When will a bond sell in the secondary market for its face value? When will a...
When will a bond sell in the secondary market for its face value? When will a bond sell in the secondary market for less than it’s face value? For more than its face value?
company's convertible bond has a conversion ratio of 50, and its stock is currently trading for...
company's convertible bond has a conversion ratio of 50, and its stock is currently trading for $32/share. 1. What is its Conversion Price? 2. What is the bond’s current price?
A certain 7 ?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at...
A certain 7 ?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the? holder's option into 23 shares of common stock. The bond is currently trading at ?$820 . The stock? (which pays 69 ?¢ a share in annual? dividends) is currently priced in the market at ?$36.65 a share. a.What is the? bond's conversion? price? b.What is its conversion? ratio? c.What is the conversion value of this? issue? What is its conversion? parity? d.What is...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 20 shares of common stock. The bond is currently trading at ​$800. The stock​ (which pays 72​¢ a share in annual​ dividends) is currently priced in the market at ​$36.34 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
A certain 5​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 5​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 17 shares of common stock. The bond is currently trading at ​$790. The stock​ (which pays 77​¢ a share in annual​ dividends) is currently priced in the market at ​$33.71 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​...
A certain 6​% annual coupon rate convertible bond​ (maturing in 20​ years) is convertible at the​ holder's option into 20 shares of common stock. The bond is currently trading at ​$800. The stock​ (which pays 65​¢ a share in annual​ dividends) is currently priced in the market at ​$30.91 a share. a. What is the​ bond's conversion​ price? b. What is its conversion​ ratio? c. What is the conversion value of this​ issue? What is its conversion​ parity? d. What...
O'Reilly Moving Company has a $1,000 par value convertible bond outstanding that can be converted into...
O'Reilly Moving Company has a $1,000 par value convertible bond outstanding that can be converted into 25 shares of common stock. The common stock is currently selling for $40.10 a share, and the convertible bond is selling for $1,050. a. What is the conversion value of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places.) Conversion Value b. What is the conversion premium? (Do not round intermediate calculations and round your answer to 2...
A certain 7?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the?...
A certain 7?% annual coupon rate convertible bond? (maturing in 20? years) is convertible at the? holder's option into 23 shares of common stock. The bond is currently trading at ?$820. The stock? (which pays 92?¢ a share in annual? dividends) is currently priced in the market at $35.87a share. a.??What is the? bond's conversion? price? b.??What is its conversion? ratio? c.??What is the conversion value of this? issue? What is its conversion? parity? d.??What is the conversion? premium, in...