The holders of Looper Industries bond with a face value of $1,000 can exchange that bond for 20 shares of stock. The stock is selling for $35.00. What is the conversion price?
A) $20.00
B) $33.33
C) $50.00
D) $1,000.00
E) No conversion premium is given.

Question

Quizplus · Accepted Answer

The conversion price is calculated by dividing the face value of the bond by the number of shares it can be converted into: $1,000 / 20 shares = $50.00 per share.

The Holders of Looper Industries Bond with a Face Value