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A $1,000 par value bond with an annual coupon rate of 5%, and callable at $1,050, can be converted into 18 shares of common stock.
A $1,000 par value bond with an annual coupon rate of 5%, and callable at $1,050, can be converted into 18 shares of common stock. Currently, common stock sells for $55 and the bond sells for $1,020. How much will this bond be worth upon conversion (conversion value)?
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
