Answer:
The value received by holder of $1,000 is $831.8
Explanation:
$1000 notes will get 33.95 shares which says 33 shares and teh cash equal to the 0.95 shares value. The convertible Bonds (CB) are converted at the will of holders into the shares or cash. The conversion price is the trading price of the share which is $24.20. Thus, a hoder of $1,000 will receive the following value:-
1) 33 shares at 24.50 which is equal to :-
=33\times 24.50=808.5
2) The cash which is equal to 0.95 share. 1 share is valued at $24.50 thus 0.95 share will be valued at:-
\frac{24.5}{1}\times 0.95=23.3
Thus total value of the common stock will be :
808.5+23.3=831.8
Thus, the value received by holder of $1,000 is $831.8