Conversion price of a bond
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Reading Railroad common stock is currently priced at $30, and its 8% convertible debentures (issued at par, or $1,000) are priced at $850. Each debenture can be converted into 25 shares of common stock at any time before 2005. What is the conversion price (CP) and the conversion value of the bond?
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Solution Summary
This solution looks at the conversion price and value of a bond.
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The conversion price of a convertible bond is its face value divided by the number of ...
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