Question: When convertible bonds are first issued: I. the conversion price of the stock is higher than the market price. II. the market price of the

When convertible bonds are first issued:

I. the conversion price of the stock is higher than the market price.

II. the market price of the stock is higher than the conversion price.

III. the interest rate is higher than if the bond were not convertible.

IV. the interest rate is lower than if the bond were not convertible.

II and III only

I and III only

II and IV only

I and IV only

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