common stock of Southern Airlines 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 2025 What is the conversion value of the bond?
A) $707.33
B) $744.56
C) $783.75
D) $825.00
E) $866.25

Question

Quizplus · Accepted Answer

The conversion value is calculated by multiplying the current stock price by the number of shares the bond can be converted into: $33 * 25 = $825.00.

Common Stock of Southern Airlines Currently Sells for $33, and Its