You own 10 Bitterroot Industries, Inc , 8 percent convertible debentures maturing in 2030 The conversion ratio of the debentures is 30, and the debentures are callable at $1,070 each You bought the debentures when they were originally issued in 2000 for $1,000 each At that time, Bitterroot common s...

a Alternatives 1 Convert and receive 30 shares of common stock presently selli ...

You own 10 Bitterroot Industries, Inc., 8 percent convertible debentures maturing in 2030. The conversion ratio of

Question:

You own 10 Bitterroot Industries, Inc., 8 percent convertible maturing in 2030. The conversion ratio of the is 30, and the are callable at $1,070 each. You bought the when they were originally issued in 2000 for $1,000 each. At that time, Bitterroot was selling at $28.50 a share, and now it is up to $44 a share. The convertible are now selling at $1,320 each. Last week, you received a notice from Bitterroot Industries stating that the company is calling the .
a. What are your alternatives?
b. Which alternative should you choose?

Debentures
Debenture DefinitionDebentures are corporate loan instruments secured against the promise by the issuer to pay interest and principal. The holder of the debenture is promised to be paid a periodic interest and principal at the term. Companies who... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...