DNA Labs Inc. has a $1,000 convertible bond outstanding that can be converted into 40 shares of
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DNA Labs Inc. has a $1,000 convertible bond outstanding that can be converted into 40 shares of common stock. The common stock is currently selling for $26.75 a share, and the convertible bond is selling for $1,118.50.
a. What is the conversion value of the bond?
b. What is the conversion premium?
c. What is the conversion price?
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...
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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