Question: 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

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.

What is the conversion value/price of the preferreds?
What is the conversion premium?
Would you convert your shares at this price?

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