Question

Assume that you purchased a $1,000 convertible corporate bond. Also assume the bond can be converted to 30.303 shares of the firm’s stock. What is the dollar value that the stock must reach before investors would consider converting to common stock?

Answer 1

The dollar value that the stock must reach before investors would consider converting to common stock is $33.

Step-by-step explanation:

stock price for conversion = $1000/30.303

= $33

Therefore, The dollar value that the stock must reach before investors would consider converting to common stock is $33.