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Big D Corporation has a $1,000 convertible bond outstanding

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Big D Corporation has a $1,000 convertible bond outstanding that can be converted into 40 shares of common stock in Big D Corporation. The common stock is currently selling for $26.75 per share, and the convertible bond is currently 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?

Please include full explanation and formulas. No Excel files.
Submitted: 7 years ago.
Category: Homework
Expert:  Linda_us replied 7 years ago.

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