Orient Airlines' common stock currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2019. What is the conversion value of the bond?
A) $707.33
B) $744.56
C) $783.75
D) $825.00
E) $866.25
Correct Answer:
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Q1: Which of the following statements is most
Q2: Which of the following statements is most
Q3: Most convertible securities are bonds or preferred
Q4: The "preferred" feature of preferred stock means
Q6: Preferred stock typically has a par value,
Q9: Which of the following statements concerning warrants
Q9: Many preferred stocks extend voting rights to
Q14: A warrant is an option, and as
Q16: The problem of dilution of stockholders' earnings
Q18: Firms generally do not call their convertibles
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