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A $1,000 par convertible debenture has a conversion price for common stock of $3

ID: 2654309 • Letter: A

Question

A $1,000 par convertible debenture has a conversion price for common stock of $39 per share. With the common stock selling at $48, what is the conversion value of the bond? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

A $1,000 par convertible debenture has a conversion price for common stock of $39 per share. With the common stock selling at $48, what is the conversion value of the bond? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Conversion Ratio ($1,000/$39) 25.64103 Selling Price 48 Conversion value (25.64103 x 48) 1230.77 Answer: $1,231.

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