A conversion price is defined as: 1. The number of shares per bond received for conversion...
A conversion price is defined as:
1. The number of shares per bond received for conversion into stock.
2. A bond that can be exchanged for a fixed number of shares of stock for a specified amount of time.
3. The value of a convertible bond if it could not be converted into common stock.
4. A feature included in the terms of a new issue of debt or preferred shares to make the issue more attractive to initial investors. (wrong answer)
5. A security that gives the holder the right to purchase shares of stock at a fixed price over a given period of time.
Homework Answers
Conversion Price is the price of the Convertible Bond, if it could not be converted into common stock.
Conversion Price is the ultimate Price of the bond on the date of conversion. It is on which we calculete the conversion Price of the Share using Conversion Ratio
Conversion Shares Price = Conversion Price / Conversion Ratio
Option 3 is correct.
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A conversion price is defined as:
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