Question

Please A B and C :) Thanks Will thumbs up

Conversion (or stock) value What is the conversion (or stock) value of each of the following convertible bonds? a. A $1,000-par-value bond that is convertible into 25 shares of common stock. The common stock is currently selling for $50.00 per share. b. A $1,000-par-value bond that is convertible into 12.5 shares of common stock. The common stock is currently selling for $42.00 per share. c. A $1,000-par-value bond that is convertible into 100 shares of common stock. The common stock is currently selling for $10.50 per share. a. The conversion or stock) value is $ . (Round to the nearest cent.)

Answer 1

The conversion value is computed as shown below:

a. The conversion value will be as follows:

= Number of shares to be converted x current stock price

= 25 shares x $ 50

= $ 1,250

b. The conversion value will be as follows:

= Number of shares to be converted x current stock price

= 12.5 x $ 42

= $ 525

c. The conversion value will be as follows:

= Number of shares to be converted x current stock price

= 100 x $ 10.50

= $ 1,050

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