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What is the conversion value-price of the preferred

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Question - ABC Corp issues convertible preferred with a $25 par value and a $2.50 annual dividend. The conversion ratio on the preferred is 3 (3 common stocks for each preferred share). The market price of the preferred is $32 and $10 for the common shares.

Required -

a) What is the conversion value/price of the preferred?

b) What is the conversion premium?

c) Would you convert your shares at this price?

Reference no: EM133071859

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