conversion price of bonds
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5. DNA Labs, Inc. has a $1,000 convertible bond outstanding that can be converted into 40 shares of common stock. The common stock is currently selling for $26.75 a share and the convertible bond is selling for $1,118.50.
a. What is the conversion value of the bond?
b. What is the conversion premium?
c. What is the conversion price?
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formula and computation given
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a. What is the conversion value of the bond?
conversion value = Current Stock Price * conversion ratio = $26.75 *40 = ...
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