Question: 26. ABC Corp issues convertible preferreds with a $25 par value and a $2.50 annual dividend. The conversion ratio on the preferred is 3 (3

26. ABC Corp issues convertible preferreds with a $25 par value

26. ABC Corp issues convertible preferreds with a $25 par value and a $2.50 annual dividend. The conversion ratio on the preferred is 3 (3 common stocks for each preferred share). The market price of the preferred is $32 and $10 for the common shares. a) What is the conversion value/price of the preferreds? b) What is the conversion premium? c) Would you convert your shares at this price

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