Reading Railroad's common stock is currently priced at $25, and its 8 percent convertible debentures (issued at par, or $1,000) are priced at $750. Each debenture can be converted into 20 shares of common stock at any time before 2005. What is the conversion price, CP, and the conversion value of the bond? You will receive 10 points each for the correct calculation of the conversion price and conversion value all work must be shown for credit.© BrainMass Inc. brainmass.com June 3, 2020, 11:49 pm ad1c9bdddf
Conversion Price CP= Face value of debenture/conversion ratio
Face value ...
The solution explains how to determine the conversion price and conversion value with calculations and the answer.