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Basic Question 12 of 18
Consider the following convertible bond:
Coupon rate: 6%
Conversion ratio: 20
Market price: 1050
Straight value: 980
Dividend yield: 4%.
Par value: $1,000
Coupon rate: 6%
Conversion ratio: 20
Market price: 1050
Straight value: 980
Underlying stock characteristics:
Current market price: $40 per share.
Dividend yield: 4%.
The conversion value of the bond is ______.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
contrast cash flow contingency provisions that benefit issuers and investors
CFA® 2025 Level I Curriculum, Volume 4, Module 2.