Bond conversion ratio


The Following data apply to neuman Corporation's convertible bonds:

  • Maturity: 10
  • Par value: $1,000.00
  • Annual coupon: 5.00%
  • Stock price: $30.00
  • Conversion price: $35.00
  • Straight-debt yeild: 8.00%

Required:

Question 1: What is the bond's conversion ratio?

Question 2: What is the bond's conversion value?

Question 3: What is the bond's straight-debt value?

Note: Please show basic calculation

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Accounting Basics: Bond conversion ratio
Reference No:- TGS0890035

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