Valentino's Pizza issues $40 million of 3% convertible bonds that mature in ten years. Each $1,000 bond is convertible into twenty-five shares of common stock. The current market price of Valentino's stock is $35 per share.
1. Explain why Valentino's might choose to issue convertible bonds.
2. Explain why investors might choose Valentino's convertible bonds.

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The Answer of Valentino's Pizza issues $40 million of 3% convertible bonds that mature in ten years. Each $1,000 bond is convertible into twenty-five shares of common stock. The current market price of Valentino's stock is $35 per share.
1. Explain why Valentino's might choose to issue convertible bonds.
2. Explain why investors might choose Valentino's convertible bonds.

Valentino's Pizza Issues $40 Million of 3% Convertible Bonds That