Conversion price is usually set ________ the prevailing market price of the common stock at the time the bond issue is sold.
A) at
B) below
C) above
D) one half

Question

Quizplus · Accepted Answer

Conversion price is usually set above the prevailing market price of the common stock at the time the bond issue is sold, as this will provide an incentive for investors to convert their bonds into stock if the stock price rises above the conversion price.

Conversion Price Is Usually Set ________ the Prevailing Market Price