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:

Decision Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

But-not Questions

Questions designed to clarify or specify by excluding certain options or conditions, often used in problem-solving or negotiation.

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The willingness to engage in actions or decisions that involve uncertainty and potential loss in order to achieve possible rewards.

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The pursuit of activities or behaviors that provide a high level of excitement or adrenaline, often involving physical risk or danger.