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Assume that you purchased a $1,000 convertible corporate bond. Also, assume the bond can be converted to 35.714 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?

Assume that you purchased a $1,000 convertible corporate bond. Also, assume the bond can be converted to 35.714 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that you purchased a $1,000 convertible corporate bond. Also, assume the bond can be converted to 35.714 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?
Transcribed Image Text:Assume that you purchased a $1,000 convertible corporate bond. Also, assume the bond can be converted to 35.714 shares of the firm's stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?
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