A Bond Has a Face Value of $15,000 and a Conversion

question 101

Multiple Choice

A bond has a face value of $15,000 and a conversion ratio of 220. The stock is currently trading at $39.20. What is the conversion price?

• A) $3.41
• B) $13.64
• C) $40.91
• D) $68.18

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Definitions:

Dividend Yield Ratio

A financial ratio that measures how much a company pays out in dividends each year relative to its stock price.

Net Operating Income

A financial metric that denotes a company’s income after subtracting operating expenses but before interest and taxes.

Total Common Stock

The aggregate value or amount of all shares of common stock issued by a company.

Net Income Before Taxes

A financial measure showing a company's profitability after accounting for all expenses except taxes.