A Firm Has an Outstanding Bond with a $1,000 Par

question 2

Multiple Choice

A firm has an outstanding bond with a $1,000 par value that is convertible at $40 per share ofcommon stock. The bond's conversion ratio is_____________ .

• A) 25
• B) 20
• C) 40
• D) 50

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry, involving the development and use of technical means and their interrelation with life, society, and the environment.

Stock of Capital

The total quantity of physical assets used in the production of goods and services in an economy.

Short-Run Aggregate Supply Curve

A graphical representation showing the relationship between the total supply of goods and services produced by an economy and the price level for those goods and services in the short term.

Long-Run Aggregate Supply Curve

A graphical representation showing an economy’s potential output level when all factors of production are fully utilized.