The companys common stock is selling for 1825 per share the


Eastern Digital Corp has a convertible bond outstanding with a coupon rate of 9% and a maturity date of 20 years. The market rate of interest on bonds of the same risk class carry a 10% return. The conversion ratio is 40. The company's common stock is selling for $18.25 per share. The bond is selling for $970. 1. What is the conversion value? 2. What is the conversion premium?

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Finance Basics: The companys common stock is selling for 1825 per share the
Reference No:- TGS0618176

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