Assume a Bond Had a Conversion Price of $40 and a Conversion

question 50

Multiple Choice

Assume a bond had a conversion price of $40 and a conversion ratio of 25.What would be the conversion ratio and conversion price if the bond issuer declared a stock split of 4-for-1?

• A)2.50; $400
• B)100; $10
• C)25; $40
• D)6.25; $160
• E)100; $25

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Definitions:

Court Consideration

The factors or evidence that a court takes into account when making a decision on a case.

Emancipated by Implied Consent

A legal status where a minor is considered independent from their parents or guardians based on actions that suggest consent, rather than a formal court order.

Reasonable Value

The fair or market value of goods or services, used when a contract does not specify a price or when damages are assessed.

Necessary

Something essential or required in a particular situation, condition, or for a specific purpose.