Ask Question
29 March, 04:56

A corporation has issued 10% convertible debentures, convertible into 40 shares of common stock. The current market price of the common stock is $25.25. If the bonds are trading at parity, they are priced at: A 100 B 101 C 106 D 107

+1
Answers (1)
  1. 29 March, 07:12
    0
    (B) 101

    Explanation:

    The bonds are convertible into 40 shares of common stock.

    The current market value of the common stock is $25.25

    The parity price of the bonds will be 40 x $25.25 = $1,010.

    The bonds are trading at parity so they are priced at $1,010 = $1,010

    Per bond = 101.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A corporation has issued 10% convertible debentures, convertible into 40 shares of common stock. The current market price of the common ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers