The Holders of Looper Industries Bond with a Face Value

question 48

Multiple Choice

The holders of Looper Industries bond with a face value of $1,000 can exchange that bond for 20 shares of stock. The stock is selling for $35.00. What would the conversion price and conversion ratio be if Looper Industries had a 4 for 1 stock split?

• A) $15.0; 120
• B) $12.5; 80
• C) $12.5; 120
• D) $15.0; 80
• E) None of these.

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Definitions:

Investing Activities

Financial actions that involve the purchase and sale of long-term assets and investments not included in cash equivalents.

Net Cash

The amount of cash available after accounting for cash inflows and outflows, used to measure liquidity and cash position of a business.

Marketable Securities

Financial instruments and assets that can be easily converted into cash without significant loss of value.

Financing Activities

Transactions and events that affect long-term liabilities and equity, such as issuing debt or equity, repurchasing shares, and paying dividends.