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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
Answer & Solution
Correct Answer:
Option
C
Rate of return on convertible bond = Value of conversion option to bond holder - Rate of return on non-convertible bond
= $550 - $270 = $280.
= $550 - $270 = $280.
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