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Management · Q273

International Finance and Treasury

Graduate and Post Graduate · Management · question 273

Q273

Value of conversion option to bond holder is 550 and rate of return on non-convertible bond is 270 then rate of return on convertible bond is

A.
2.04%
B.
$2.04
C.
$280
Answer
D.
$820

Answer: Option C

Solution

Answer: Option C
Solution:
Rate of return on convertible bond = Value of conversion option to bond holder - Rate of return on non-convertible bond
= 270 = $280.
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