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Standard Olive Company of California has a $ 1 , 0 0 0 par value convertible bond outstanding with a coupon rate of 7 percent
Standard Olive Company of California has a $ par value convertible bond outstanding with a coupon rate of percent and a maturity date of years. It is rated Aa and competitive, nonconvertible bonds of the same risk class carry a percent yield. The conversion ratio is Currently the common stock is selling for $ per share on the New York Stock Exchange.
a What is the conversion price? Round your answer to decimal places.
b What is the conversion value? Round your answer to decimal places.
c Compute the pure bond value. Use semiannual analysis. Use Appendix B and Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods. Do not round intermediate calculations. Round your final answer to decimal places.
d Calculate the crossover point at which the pure bond value equals conversion value. Do not round intermediate calculations. Round your answer to decimal places.
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