Lucky Dog Pet Food has a $1,000 convertible bond outstanding with a conversion price of $18.00 per share.The bond pays an interest payment of $50 semiannually and matures in 20 years unless converted into common shares earlier or called by the company.The common shares currently sell for $14.70 per share.If the bond sold at its theoretical bond value it would be priced competitively to yield 12% with bonds of the same risk class.
A)How many shares of common stock are received on conversion?
B)What is the conversion value?
C)What is the pure bond value?
D)How much downside protection has the pure bond value provided to investors? (answer in dollars)

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The Answer of Lucky Dog Pet Food has a $1,000 convertible bond outstanding with a conversion price of $18.00 per share.The bond pays an interest payment of $50 semiannually and matures in 20 years unless converted into common shares earlier or called by the company.The common shares currently sell for $14.70 per share.If the bond sold at its theoretical bond value it would be priced competitively to yield 12% with bonds of the same risk class.

Lucky Dog Pet Food Has a $1,000 Convertible Bond Outstanding