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:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, or insurance.

Monthly Sales Volume

The total quantity of products or services sold by a company in a month.

Fixed Manufacturing Cost

Costs that do not vary with the level of production or sales, such as rent for factory premises, salaries of permanent staff, and depreciation of factory equipment.

Monthly Production Volume

The total count of units produced by a company in a month, reflecting the scale of its manufacturing operations.