Conversion price is:
A)the number of common stock shares owned after the conversion.
B)the effective price of the common stock per share obtained by converting.
C)the market price of the common stock per share.
D)the difference between the market price of the common stock and the exercise price of the stock.

Question

Quizplus · Accepted Answer

Conversion price is the effective price of the common stock per share obtained by converting. It refers to the price at which a convertible security can be exchanged for common stock. It is usually stated in the terms of the security itself, and it is important for investors to know the conversion price because it can affect the value of the security. A lower conversion price means the security is more valuable because it can be converted into more shares of common stock at a lower price.

Conversion Price Is