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What is the conversion value of the bond

Problem: Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2017. What is the conversion value of the bond?

A. $707.33

B. $744.56

C. $783.75

D. $825.00

E. $866.25

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the conversion value of the bond

Reference No:- TGS01451464

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Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the conversion value of the bond

Reference No:- TGS01451464

Recent Questions Asked Finance Basics

Q : Standard devaiation of expected returns

Q : What is interfaces product

Q : Goal of wealth maximization

Q : What factors determine the value of stock

Q : What is the conversion value of the bond

Q : Paid-in capital in excess of par value-preferred stock

Q : Representing an after-tax risk premium

Q : Companies pro forma financial paper

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