A convertible bond has a $1,000 face value, is selling for $1,160, and has a conversion ratio of 25 shares of common stock for each convertible bond. If the stock price is currently selling at $45, what is the conversion value? What is the conversion premium? (Hint: These answers are whole numbers, also known as integers. In other words, there are no numbers to the right of the decimal points..) A convertible bond with a par value of $1,000 has a conversion value of $930. The stock is currently priced at $62. What is the conversion ratio of the bond? (Hint: The answer is a whole number, also known as an integer. In other words, there is no number to the right of the decimal point.)
A convertible bond has a $1,000 face value, is selling for $1,160, and has a conversion ratio of 25 shares of common stock for each convertible bond. If the stock price is currently selling at $45, what is the conversion value? What is the conversion premium? (Hint: These answers are whole numbers, also known as integers. In other words, there are no numbers to the right of the decimal points..) A convertible bond with a par value of $1,000 has a conversion value of $930. The stock is currently priced at $62. What is the conversion ratio of the bond? (Hint: The answer is a whole number, also known as an integer. In other words, there is no number to the right of the decimal point.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A convertible bond has a $1,000 face value, is selling for $1,160, and has a conversion ratio of 25 shares
of common stock for each convertible bond. If the stock price is currently selling at $45, what is the
conversion value? What is the conversion premium? (Hint: These answers are whole numbers, also known as
integers. In other words, there are no numbers to the right of the decimal points..)
Transcribed Image Text:A convertible bond with a par value of $1,000 has a conversion value of $930. The stock is currently
priced at $62. What is the conversion ratio of the bond? (Hint: The answer is a whole number, also known as an
integer. In other words, there is no number to the right of the decimal point.)
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