If a $6,000 bond is issued with a conversion feature that allows the bond to be convertible into 20 shares of common stock, what is the implied exercise price of the shares?
A) $0
B) $6,000
C) $300
D) $20

Question

Quizplus · Accepted Answer

The implied exercise price is calculated by dividing the bond's value by the number of shares it can be converted into: $6,000 / 20 shares = $300 per share.

If a $6,000 Bond Is Issued with a Conversion Feature