Solved: Determine the bonds conversion ratio, Finance Basics

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Determine the bonds conversion ratio

Problem: The following data apply to Saunders Corporation's convertible bonds:

Maturity   10       Stock Price            $30.00
Par Value      $1,000    Conversion Price    $35.00
Annual Coupon    5%   Straight-Debt Yield    8%

Q1) What is the bond's conversion ratio?

Q2) What is the bond's conversion value?

Q3) What is the bond's straight-debt value?

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Finance Basics: Determine the bonds conversion ratio

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