Yebuzz Ltd has just raised $100 million by an issue of 10 million converting preference shares.Each CPS converts into five ordinary shares.If the ordinary share price immediately prior to conversion is $2 per share,calculate the rate of the conversion discount.
A)0.5%
B)0.9%
C)0%
D)5%

Question

Quizplus · Accepted Answer

The conversion discount is 0% because the conversion price ($2 per share) is equal to the ordinary share price immediately prior to conversion, indicating no discount or premium on conversion.

Yebuzz Ltd Has Just Raised $100 Million by an Issue