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tekilochka [14]
3 years ago
15

The conversion price of CRX’s convertible ($1,000 par) subordinated debentures is $40 and the present market price of CRX common

stock is $48. Determine the present conversion value of the convertible issue.
Business
1 answer:
Tom [10]3 years ago
5 0

Answer:

$1,200

Explanation:

For this question, we use the unitary method that is shown below:

Given that

Conversion price = $1,000 par

And, the subordinated debentures is $40

And the present market price is $48

So, the present conversion value is

= Conversion price ×  the present market price ÷ the subordinated debentures

= $1,000 × $48 ÷ $40

= $1,200

 

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