Need answer please Assume that you purchased a $1,000 convertiblecorporate bond. Also, assume the bond can beconverted to 35.714 shares of the firm's stock. Whatis the dollar value that the stock must reach beforeinvestors would consider converting to commonstock?

For this problem, we need to determine the conversion price. Conversion price refers to the price…

Answered: Assume that you purchased a $1,000…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter8: Securities Law Considerations When Obtaining Venture Financing

Section: Chapter Questions

Problem 1fM

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A$1,000 face value convertible bond has a conversion ratio of 31 and is about to mature. Ignoring any transaction costs, what price must the stock surpass in order for you to convert? The required price per share will be $ (Round to the nearest cent.)
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Assume that you purchased a $1,000 convertible corporate bond. Also, assume the bond can be converted to 35.714 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?