A convertible bond has a par value of $1 000 but its current market price is $975. The current price of the issuing company's shares is $26 and the conversion ratio is 34 shares. The bond's market conversion value is ________.

Question

Quizplus · Accepted Answer

The market conversion value is the number of shares the bond can be converted into multiplied by the current market price of the shares. In this case, the bond can be converted into 34 shares, and the current market price of the shares is $26, so the market conversion value is 34 * $26 = $884.

A Convertible Bond Has a Par Value of $1 000