Looper Industries bonds have a face value of $1,000 and can be exchanged for 30 shares of

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Looper Industries bonds have a face value of $1,000 and can be exchanged for 30 shares of stock. The stock is selling for $35 a share. Looper has an outstanding call option on the bonds at $1,040. If the bonds are called, the holders must either convert or surrender their bonds. What should be the current market value of one of these bonds if the option premium per bond is $15? Assume the bond coupon rate equals the market rate of interest at time of call.

A. $1,040

B. $1,065

C. $1,025

D. $1,030

E. $1,035

Posted Date: Dec 07, 2021 10:03 PM

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