Calculate the conversion ratio and conversion value

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Reference no: EM131190913

The XLarge Corporation has a convertible bond outstanding with a conversion price of $35 per share. The $1000 par value bonds have a 6% annual coupon rate, paid annually, and 20 years to maturity. The firm's common stock is currently selling for $44 per share and the convertible bonds are selling for $1,200.00. A. Calculate the conversion ratio. B. Calculate the conversion value. C. If equivalent bonds are currently yielding 12% to maturity, what is the pure bond value of this bond?

Reference no: EM131190913

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