Question

The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is

a.

0.0137

b.

1280

c.

1.37

d.

200

Answer: (d).200

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Q. The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is

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