How many shares of common stock can be obtained by convert

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Automatic Data Processing recently issued $150 million of 61⁄2 percent convertible debentures maturing in 2011. The debentures are convertible into common stock at $83.45 a share. The company's common stock was trading at about $67 a share when the convertibles were issued.

a. How many shares of common stock can be obtained by converting one $1,000 par value debenture; that is, what is the conversion ratio?

b. What was the conversion value of this issue when these debentures were originally issued?

c. By what percentage was the conversion price above the stock price when these debentures were originally issued?

Reference no: EM131122187

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