Convertible debentures for Kulik Corporation were issued at their $1,000 par value in 2012. At any time prior to maturity on February 1, 2032, a debenture holder can exchange a bond for 25 shares of common stock. What is the conversion price, Pc?

Question

Quizplus · Accepted Answer

$\begin{array}{lccc}
\text { Par value} & \$ 1,000.00 \
 \text { Conversion ratio.} & 25.00
\end{array}$
 
Conversion price = Par value/Conversion ratio = $40.00

Convertible Debentures for Kulik Corporation Were Issued at Their $1,000