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A convertible bond with a conversion rate of 25 is selling for 948.72.Thepriceoftheissuer′sotherwiseidenticaloption−freebondis948.72. The price of the issuer's otherwise identical option-free bond is 948.72.Thepriceoftheissuer′sotherwiseidenticaloption−freebondis952.65 and the underlying share price is $37.20. The convertible bond is:
A
undervalued.
B
fairly valued.
C
overvalued.
