Nick Andrews, a fixed-income investment analyst, has been asked by his supervisor to prepare an analysis of the convertible bond issued by Heavy Element Inc., a chemical industry company, for presentation to the investment committee. Andrews has gathered the following data from the convertible bond’s prospectus and market information:

Issuer: Heavy Element Inc.

Issue Date: 15 September 2020

Maturity Date: 15 September 2025

Interest: 3.75% payable annually

Issue Size: $100,000,000

Issue Price: $1,000 at par

Conversion Ratio: 23.26

Convertible Bond Price on 16 September 2022: $1,230

Share Price on 16 September 2022: $52

The risk–return characteristics of the convertible bond on 16 September 2022 most likely resemble that of:

A. A busted convertible.

B. Heavy Element’s common stock.

C. A bond of Heavy Element that is identical to the convertible bond but without the conversion option.