Question

The holders of ZZZ Corporation's bonds with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $25.00. What is the conversion price

Answer 1

$28.57

Step-by-step explanation:

The holders of ZZZ corporation bonds with a face value of $1000

It can be exchanged for 35 share of the stock

The stock is being sold for $25.00

Therefore, the conversion price can be calculated as follows

= $1000/35

= $28.57

Hence the conversion price is $28.57