Homework Answers
The value of shares = 20 x 80 = 1600 and the value of bond = 1000
so bond holder will choose to convert them.
All other possibilities are wrong. because to make bond and stock price equivalent, stock price will not go down because stock price is not dependent on bond price. Bond price is also dependent on many factors, so nothing can be said about bond prices
correct answer : bond holder will choose to convert them. [Thumbs up please]
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