5. Plunkett Gym Equipment, Inc., has a $1,000 par value convertible bond outstanding that can be converted

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5. Plunkett Gym Equipment, Inc., has a $1,000 par value convertible bond outstanding that can be converted into 25 shares of common stock. The common stock is currently selling for $34.75 a share, and the convertible bond is selling for $960.

a. What is the conversion value of the bond?

b. What is the conversion premium?

c. What is the conversion price?

(Assume all bonds in the following problems have a par value of $1,000.)

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Foundations Of Financial Management

ISBN: 9780073382388

13th Edition

Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen

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Question Posted: Oct 22, 2024 06:02 AM

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5. Plunkett Gym Equipment, Inc., has a $1,000 par value convertible bond outstanding that can be converted

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Foundations Of Financial Management

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