Bond Yields and Prices

Parity Price of Bond=(Conversion ratio) X (Stock’s Market Price) I.e. bond convertible @ $40 share. Conversion Ratio: 1 bond = $1000/40 = 25 shares. Current Market Price $35 shares. Parity Value = Current Stock Price * conversion ratio. $35 * 25 = $875.00. Trade above parity--conversion value is zero. Trading like a straight bond ................
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