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A bond is convertible into common stock for $50. If the company announces a 50% stock...

A bond is convertible into common stock for $50. If the company announces a 50% stock dividend, what is the new conversion price?

$18.18

$22.22

$33.33

$45.45

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Expert Solution

New conversion price = $33.33
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Statement showing Computations
Particulars Amount
new conversion price = $50/(1+.50)                        33.33

jeff jeffy answered 2 years ago
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