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Conversion (or stock) value of convertible bonds?

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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 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 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.

Please show all calculations and work.

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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 ...

Solution Summary

This solution is comprised of a detailed explanation to answer what is the conversion (or stock) value of each of the following convertible bonds.

$2.19