Solved: What is the conversion rate-what is the conversion value, Finance Basics

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What is the conversion rate-what is the conversion value

Problem:

A convertible bond has a face value of $1000, and the conversion price is $50 per share. The stock is selling at $42 per share. The bond pays $60 per year interest and is selling in the market for $930. It matures in 15 years. Market rates are 10 percent per year.

- What is the conversion rate?

- What is the conversion value?

- What is the conversion premium (in dollars and precent)?

- Waht is the floor vlure or pure bond value?

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Finance Basics: What is the conversion rate-what is the conversion value

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