Answered

Explore Westonci.ca, the leading Q&A site where experts provide accurate and helpful answers to all your questions. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

a bond that is currently selling for $939.39 has a conversion price of $31.25. if the par value is $1,000, what is the conversion ratio?

Sagot :

azikennamdi

The conversion ratio of a bond that is currently selling for $939.39 and has a conversion price of $31.25 and a par value is $1,000 is 31.8 : 1.

What is the definition of conversion ratio?

For any convertible securities, such as a convertible bond, the conversion ratio is the number of common shares received at the moment of conversion. Convertible debt is a debt hybrid product that has an incorporated option to convert debt into equity in the future.

With regard to the above response, the conversion ratio of a bond is equal to the par value of the bond divided by the conversion price.

Since the par value of the bond, in this case, is $1,000 and the conversion price is $31.25, the conversion ratio is:

$1,000/$31.25 = 31.8.

This means that for every 31.8 bonds, the bondholder can convert them into one share of the company's stock, hence the ratio is 32.8 : 1

Learn more about conversion ratio:
https://brainly.com/question/24166407
#SPJ1

We appreciate your time. Please come back anytime for the latest information and answers to your questions. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.