SIE practice questionhardConvertible bonds
An investor owns a convertible bond with a conversion price of $25. If the bond's par value is $1,000, how many shares can be acquired upon conversion?
- A20
- B25
- C50
- D40✓ Correct answer
Explanation
Why D — 40
Conversion ratio = $1,000 par / $25 conversion price = 40 shares. Other options result from incorrect calculations.
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