What would the conversion price and conversion ratio be if Xenron had a 3 for 1 stock split?
A) $22; 25
B) $28.57; 35
C) $9.52; 105
D) $7.33; 75

Question

Quizplus · Accepted Answer

When a 3 for 1 stock split occurs, the number of outstanding shares is increased by a factor of 3, and the stock price is divided by 3. 
Therefore, the conversion ratio would increase from 35 to 105 (3 times the original ratio of 35). 
The conversion price would decrease from $28.57 to $9.52 (1/3 of the original price of $28.57). 
So, the correct answer is C, which corresponds to a conversion price of $9.52 and a conversion ratio of 105.

What Would the Conversion Price and Conversion Ratio Be If