Orient Airlines' Common Stock Currently Sells for $33,and Its 8

question 23

Multiple Choice

Orient Airlines' common stock currently sells for $33,and its 8% convertible debentures (issued at par,or $1,000) sell for $850.Each debenture can be converted into 25 shares of common stock at any time before 2017.What is the conversion value of the bond?

• A)$707.33
• B)$744.56
• C)$783.75
• D)$825.00

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Definitions:

Illusory Consideration

A promise or apparent agreement that lacks the actual commitment or substance to be legally enforceable as consideration in a contract.

Unliquidated Debt

A debt for which the exact amount owed has not been determined.

Career Stress

The stress experienced by individuals in their job roles, often resulting from demands, challenges, or conflicts at work that exceed their coping resources.

Stressful Working Conditions

A work environment characterized by high demands, low levels of control, and potentially harmful physical or psychological effects on employees.