The holders of Xenron Corporation's bond with a face value of €1,000 can exchange that bond for 35 shares of equity.The equity is selling for €22.00.What is the conversion price?
A)€22.00
B)€28.57
C)€35.00
D)€1,000.00
E)No conversion premium is given.

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. 
Conversion price = €1,000 / 35 shares = €28.57 per share. 
Therefore, the best choice is B.

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