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A convertible bond is convertible into common stock at a 32:1 ratio. The common stock is currently trading at $30. The bond is currently trading at $980. What is the conversion price?

Respuesta :

segehood

Answer:

$31.25

Explanation:

Conversion price refers to the price per share in which a convertible bond is converted into a common stock.

Conversion price = par value of bond ÷ conversion ration

Thus,

Conversion price = 1000 ÷ 32

=$ 31.25

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