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Hybrid Financing: Orient Airlines' Common Stock

Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2017. What is the conversion value of the bond?

A. $707.33
B. $744.56
C. $783.75
D. $825.00
E. $866.25

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Hybrid Financing
Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or ...

Solution Summary

This solution provides calculations for conversion value.

$2.19