Which ONE of the following statements is true?
A) To secure the conversion option on a bond, bondholders would be willing to pay a premium.
B) The conversion ratio is set so that the firm's stock price must appreciate 15 to 20 percent before it is profitable to convert bonds into equity.
C) Convertible bonds can be converted into shares of common stock at some predetermined ratio at the discretion of the bondholder.
D) All of the above are true.
Answer: D
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