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Question
The common stock of Southern Airlines currently sells for $33, and its 8% convertible debentures (issued at par, or $1,000) sell for $850. Each debenture can be converted into 25 shares of common stock at any time before 2025. What is the conversion value of the bond?a. $707.33
b. $744.56
c. $783.75
d. $825.00
e. $866.25
Answer
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