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Business, 16.12.2019 23:31 kaziyahf2006

Convertible preferred stock valerian corp. convertible preferred stock has a fixed conversion ratio of 5 common shares per 1 share of preferred stock. the preferred stock pays a dividend of $6.00 per share per year. the common stock currently sells for $40 per share and pays a dividend of $1.50 per share per year. a. on the basis of the conversion ratio and the price of the common shares, what is the current conversion value of each preferred share? b. if the preferred shares are selling at $203 each, should an investor convert the preferred shares to common shares? c. what factors might cause an investor not to convert from preferred to common stock?

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