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Business, 29.02.2020 03:12 clairajogriggsk

A corporation has issued $1,000 par, 8% convertible bonds, callable at par. The bonds are convertible into 20 shares of common stock. Currently, the bond is trading at 102 while the common stock is trading at $52. The corporation calls the bonds at par plus accrued interest of $20 per bond. A customer holds 100 bonds, purchased at par. The customer wishes to liquidate the position at the greatest profit. The BEST recommendation is to (ignoring commissions):

A. tender the bonds at the call price
B. sell the bonds at the current market price
C. sell short the common stock and convert the bonds for delivery to cover the short
D. continue to hold the bonds

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A corporation has issued $1,000 par, 8% convertible bonds, callable at par. The bonds are convertibl...
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