Respuesta :
$920.00 The bond's parity price, first find the number of shares the debenture can be converted into (the conversion ratio) by dividing the par value by the conversion price ($1,000 x $25 = 40 shares).
Next, divide the conversion ratio by the current common price. The bond's parity price is the result (40 shares minus $23 = $920).
The present value of the liability divided by the market interest rate is the effective interest. The amount of actual interest paid is equal to the bond's face value divided by the number. of Issued Bonds x Coupon Rate
What is the convertible bond value formula?
The following formula can be used by investors to arrive at convertible bond valuations: The value of a convertible bond is the sum of the independent values of a straight bond and a conversion option.
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