SIE practice questionmediumPreferred Stock - Convertible
A convertible preferred stock with a $100 par value is convertible into 5 shares of common stock. If the common stock trades at $18, what is the conversion value?
- A$90✓ Correct answer
- B$100
- C$120
- D$36
Explanation
Why A — $90
5 x $18 = $90, the value of conversion. The other answers misapply the math or concept.
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