Preissle Company wants to sell some 20-year, annual interest, $1,000 par value bonds. Its stock sells for
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Question:
The common stock of Southern Airlines currently sells for $34, and its 10-years-to-maturity 9% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 28 shares of common stock at any time before maturity. The YTM for straight debt is 13%. What is the conversion value of the bond?
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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