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NEW QUESTION: 1
Bubba buys a bond issued at par with a 5% coupon that is convertible into common stock at $40. The bond increases in value by 20 points.
What is the conversion parity of the stock?
A. $48
B. $40
C. $25
D. $50
Answer: A
Explanation:
Explanation/Reference:
Explanation: $48. A 20-point increase results in a bond value of $1,200. Divide that by the conversion ratio of 25 shares to arrive at $48.

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