Question: Use the following information for problems 14 thru 16. The following facts are available about a convertible bond: Face Value = $1,000; Issue Price =

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 conversion price of this bond?

a. $10

b. $20

c. $40

d. $50

What is the bond s parity?

		a. $875
		b. $975
		c. $1,000
		d. $1,750

What is the bond s premium?

		a. $100
		b. $875
		c. $975
		d. $1,000

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