The holders of Mikayla Corporation's bond with a face value of $1,000 can exchange that bond for 30 shares of stock. The stock is selling for $25.00.
-Refer to the above scenario.What is the conversion price?
A)$25.00
B)$33.33
C)$35.00
D)$1,000.00
E)No conversion premium is given.

Question

Quizplus · Accepted Answer

Conversion price = face value of bond/number of shares received upon conversion
= $1,000/30
= $33.33

The Holders of Mikayla Corporation's Bond with a Face Value