The holders of ZZZ Corporation's bond with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $25.00. What is the conversion price?
A) $35
B) $7.70
C) $28.57
D) None of the above

Question

Quizplus · Accepted Answer

To find the conversion price, we need to divide the face value of the bond by the number of shares received upon conversion.

$1,000 / 35 shares = $28.57 per share

Therefore, the conversion price is $28.57.

The Holders of ZZZ Corporation's Bond with a Face Value