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Value of conversion option to bond holder is $550 and rate of return on non-convertible bond is $270 then rate of return on convertible bond is

Value of conversion option to bond holder is $550 and rate of return on non-convertible bond is $270 then rate of return on convertible bond is Correct Answer $280

Rate of return on convertible bond = Value of conversion option to bond holder - Rate of return on non-convertible bond
= $550 - $270 = $280.

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