The holders of ZZZ Corporation's bonds with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $25. What is the conversion value of the bond?
A)$1,000
B)$875
C)$1,200
D)$965

Question

Quizplus · Accepted Answer

To calculate the conversion value of the bond, we simply multiply the number of shares received upon conversion (35) by the current market price of the stock ($25). 
Conversion value = 35 x $25 = $875 
Therefore, the correct answer is (B) $875.

The Holders of ZZZ Corporation's Bonds with a Face Value