The holder of a $1,000 face value bond has the right to exchange the bond any time before maturity for shares of stock priced at $50 per share. The $50 is called the:
A) conversion price.
B) stated price.
C) exercise price.
D) striking price.
E) None of these.

Question

Quizplus · Accepted Answer

The $50 is called the conversion price, which represents the price at which the bondholder can convert their bond into shares of stock. The stated or coupon price refers to the interest rate on the bond. The exercise price is commonly used in options contracts, while the striking price is another term for the exercise price.

The Holder of a $1,000 Face Value Bond Has the Right