What is the conversion value of the bonds


A company has debentures outstanding (par value = $1,000) that are convertible into common stock at a price of $40 per share. The convertible bonds have a coupon interest rate of 8%, pay coupons annually, and will be matured in 20 years. What is the conversion value of the bonds if the company s common stock is selling for $35 per share?

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Accounting Basics: What is the conversion value of the bonds
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