EBK CFIN
5th Edition
ISBN: 9781305888036
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 6, Problem 2PROB
Summary Introduction
The convertible bond has a conversion ratio of 40 and a face value of $1,000.
Convertible bonds are a specific type of bonds in which the bondholders have an option to convert their bonds in to stocks. Conversion ratio determines the number of stocks given per bond. Conversion price is thus, the price to be paid for each share of stock which the investors will receive.
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