Question: Alejandro owns a convertible bond with a conversion ratio equal to 40. The face value of each bond is $2,000. The current market value of

Alejandro owns a convertible bond with a conversion ratio equal to 40. The face value of each bond is $2,000. The current market value of the companys common stock is $20, and the bond is selling for $1800. If Alejandro wants to liquidate today, should he sell the bond or should he convert the bond into common stock and then sell the stock? Explain your answer.

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