Acorporation has issued $20,000,000 of 7%, 15 year, $1,000 par, convertible debentures, convertible at a ratio of 32: 1. the bond is currently trading at 105, while the company's common stock is at $35. which statements are true?

C) II and III

Explanation:

Currently the stock is trading at $35 and the parity price is $32.81 (= market price of bond / conversion ratio = $1,050 / 32 = $32.81), that means that the stock is trading at a premium to parity THIS IS AN OPPORTUNITY FOR ARBITRAGE.

You can make a profit if you SELL SHORT 32 shares at $35 per share = $1,120 and immediately buy 1 bond at $1,050. Then convert the bond into 32 common shares and you will make a $70 profit (= $1,120 - $1,050).

answer; manager working long hours; plz check i believe this is correct good luck;