Question: 1 ) Use the following information for problems 1 4 thru 1 6 . The following facts are available about a convertible bond: Face Value

1) Use the following information for problems 14 thru 16. The following facts are available about a convertible bond: Face Value = $1,000; Issue Price = $975; Conversion Ratio =50; Current Market Share Price = $17.50.
What is the bond s parity?
a. $875
b. $975
c. $1,750
d. $1,750
2) Use the following information for problems 14 thru 16. The following facts are available about a convertible bond: Face Value = $1,000; Issue Price = $975; Conversion Ratio =50; Current Market Share Price = $17.50.
What is the bond s premium?
a. $100
b. $875
c. $975
d. $1,000

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