Wilder Home Products, Inc., recently issued $2 million worth of 3 percent convertible debentures. Each convertible bond
Question:
Wilder Home Products, Inc., recently issued $2 million worth of 3 percent convertible debentures. Each convertible bond has a face value of $1,000. Each convertible bond can be converted into 18.4 shares of common stock anytime before maturity. The stock price is $34.86 and the market value of each bond is $980.
a. What is the conversion ratio?
b. What is the conversion price?
c. What is the conversion premium?
d. What is the conversion value?
e. If the stock price increases by $2, what is the new conversion value?
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a The conversion ratio is 1 share of common stock equals 3486 ...View the full answer
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Related Book For 
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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