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Consider a $1,000 par bond that is convertible at $50 per share. a. Calculate the bonds conversion ratio. b. Calculate the bonds conversion value if

Consider a $1,000 par bond that is convertible at $50 per share.

a. Calculate the bonds conversion ratio.

b. Calculate the bonds conversion value if the issuing firms stock price is $55 per share.

c. The firm has another bond that is identical except that it does not have a conversion feature.

That bond sells for $1,050. What is the minimum price at which the convertible bond

should sell?

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