Question
Tesla Inc. issued convertible bonds with a face value of $1,000, a coupon rate of 3%, and a conversion ratio of 15 shares per $1,000
Tesla Inc. issued convertible bonds with a face value of $1,000, a coupon rate of 3%, and a conversion ratio of 15 shares per $1,000 bond. The current market price of Tesla stock is $350 per share. Calculate the bond's conversion price per share and discuss the advantages and disadvantages of conversion for bondholders at the current stock price.
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
