A firm has an outstanding bond with a $1,000 par value that is convertible at $40 per share ofcommon stock. The bond's conversion ratio is_____________ .

Name: A firm has an outstanding bond with a $1,000 par value that is convertible at $40 per share ofcommon stock. The bond's conversion ratio is_____________ .
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Question

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The conversion ratio is calculated by dividing the par value of the bond by the conversion price per share. In this case, the conversion ratio is $1,000 / $40 = 25.

A Firm Has an Outstanding Bond with a $1,000 Par