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Business, 02.03.2020 23:33 zackinator4894

Hilton Hotels Corp. has a convertible bond issue outstanding. Each bond, with a face value of $1,100, can be converted into common shares at a rate of 61.2994 shares of stock per $1,100 face value bond (the conversion rate), or $17.9447 per share. Hilton’s common stock is trading (on the NYSE) at $17.53 per share and the bonds are trading at $1,075.

(a) Calculate the conversion value of each bond. (Round your answer to 2 decimal places. (e. g., 32.16))
(b) State whether it is currently profitable for bond holders to convert their bonds into shares of Hilton Hotels common stock.

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Hilton Hotels Corp. has a convertible bond issue outstanding. Each bond, with a face value of $1,100...
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