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 would the conversion price and conversion ratio be if Looper Industries had a 4 for 1 stock split?
A) $15.0; 120
B) $12.5; 80
C) $12.5; 120
D) $15.0; 80
E) None of these.

Question

Quizplus · Accepted Answer

After a 4 for 1 stock split, the conversion ratio becomes 80 (20 shares * 4), and the conversion price becomes $12.5 ($1,000 / 80 shares).

The Holders of Looper Industries Bond with a Face Value