Which of the following best defines a conversion price?
A) An option that can be exercised at any time until its expiration date.
B) The right to buy an asset at a fixed price during a particular period of time.
C) The dollar amount of a bond's par value that is exchangeable for one share of stock.
D) The number of shares per bond received for conversion into stock.
E) The value of a convertible bond if it was immediately converted into common stock.

Question

Quizplus · Accepted Answer

The conversion price is defined as the dollar amount of a bond's par value that is exchangeable for one share of stock, indicating the price at which a convertible bond or preferred share can be converted into common stock.

Which of the Following Best Defines a Conversion Price