SERIES-6 practice question 31 of 35
Steel Dynamics (STLD) has a convertible bond issue that matures in four years. The bond has a face value of $1,000 and pays a coupon of 5.125%, with interest paid semiannually. The conversion ratio is 56.9801. If the stock of Steel Dynamics is currently priced at $15 a share, what is the conversion value of this bond, to the nearest cent?
Full set: 325 questionsCorrect Answer:
<P>A</P>
Explanation
The conversion value of this bond $854.70. It is equal to its conversion ratio of 56.9801 times the current market price of its stock, $15. Thus, 56.9801 x $15 = $854.70.
Keep practicing
Take the free SERIES-6 practice test
Ten exam-style questions with answers and explanations, plus the exam facts and study guides.
More questions
Other SERIES-6 practice questions
- Question 1Which of the following pieces of information may not be contained in a tombstone advertis…
- Question 2Mr. Investor has purchased 100 shares of the common stock of the Everyman Corporation. As…
- Question 3Mr. Big of HiGrow Corporation needs more money to support the exceptional growth rate tha…
- Question 5The stock of Hasbro Corporation (HAS) is selling for $44.50 and pays a dividend of $1.00 …
- Question 6Any person who willfully acts in violation of the Securities Act of 1933, or any SEC rule…
- Question 7Which of the following statements regarding callable bonds is false?