A Bond Has a Face Value of $10,000 and a Conversion

question 70

Multiple Choice

A bond has a face value of $10,000 and a conversion price of $17.86.The stock is currently trading at $16.30.What is the conversion ratio?

• A)330
• B)487
• C)500
• D)560
• E)614

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Definitions:

Allocated

The distribution of resources, costs, or expenses to specific departments, projects, or cost centers according to a predetermined method.

Constant Gross Margin Method

An inventory valuation method that maintains a fixed gross margin percentage for costing inventory despite changes in the cost of goods sold.

Joint Cost

The costs incurred in producing products up to a split-off point in a process that yields multiple products, typically allocated among the products based on some reasonable method.

Split-off

A point in the manufacturing process where multiple products are generated from a common input.