Diamond Drill Inc.has 150,000 shares and 15,000 warrants outstanding.A warrant holder can purchase a new share of equity for ﬁve warrants and €5.00 per warrant.The equity is currently
Selling for €27 per share.The holder of a €1,000 face value bond can exchange the bond any time
For 25 shares of equity.The conversion ratio is:

Question

Quizplus · Accepted Answer

The conversion ratio is the number of shares of equity into which a bond can be converted. Here, it's explicitly stated that a €1,000 face value bond can be exchanged for 25 shares of equity, making the conversion ratio 25.