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QUESTION
Reading Railroad common stock is currently priced at $30, and its 8% convertible debentures (issued at par, or $1,000) are priced at $850.
Reading Railroad common stock is currently priced at $30, and its 8% convertible debentures (issued at par, or $1,000) are priced at $850. Each debenture can be converted into 25 shares of common stock at any time before 2005. What is the conversion price (CP) and the conversion value of the bond?
