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

ID: 2795911 • Letter: A

Question

A $1,000 par convertible debenture has a conversion price for common stock of $33 per share. With the common stock selling at $42, what is the conversion value of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

A $1,000 par convertible debenture has a conversion price for common stock of $33 per share. With the common stock selling at $42, what is the conversion value of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Conversion Value = Bond Value x Common stock price / conversion value

= 1000 x 42 / 33

= $1272.73

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