Chapter 22: Convertibles, Exchangeables, and Warrants MCQs

Multiple-Choice Quiz

Chapter 22:   Convertibles, Exchangeables, and Warrants

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1. A $500 par-value convertible debenture is selling at $520. If the conversion ratio is 20, what is the conversion price?

$19.23

$20.18

$25.00        Correct!

 Conversion ratio = (Face value) / (Conversion price)

 Conversion price = $500 / 20 = $25

$26.00