anonymous
  • anonymous
B & O Railroad's convertible debentures were issued at their $1,000 par value in 2008. At any time prior to maturity on February 1, 2028, a debenture holder can exchange a bond for 25 shares of common stock. What is the conversion price, Pc ? a. $25 b. $40 c. $1,025 d. $1,000 e. $50
Finance
  • Stacey Warren - Expert brainly.com
Hey! We 've verified this expert answer for you, click below to unlock the details :)
SOLVED
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
schrodinger
  • schrodinger
I got my questions answered at brainly.com in under 10 minutes. Go to brainly.com now for free help!
anonymous
  • anonymous
A convertible note (or debenture or wtv) is usued at par and you know from the beginning you get 25 shares for each note. So, $1,000=25 shares --> divide each side by 25 and you get your conversion ratio, $1000/25=conversion ratio of 40. The conversion price is the ratio of the par value of your note to your conversion ratio, so $1,000/40=$25. http://www.maileyrogers.com/documents/Intro_to_Convertible_Debentures.pdf

Looking for something else?

Not the answer you are looking for? Search for more explanations.