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:

Administrative Expense

Expenses associated with the general management of a business, such as salaries of executives, office supplies, and utilities.

Statement of Owner's Equity

A financial document reflecting changes in the equity of a company's owners over a certain period, including capital contributions, withdrawals, and the net income or loss.

Balance Sheet

A summary of a corporation's assets, liabilities, and equity held by shareholders, documented at a particular moment.

Periodic Inventory System

An accounting method where the inventory level is updated in the accounting records at specific intervals, rather than after each sale or purchase.