Jacobs Corporation has the following shareholders' equity on December 31, 2014:
-If one preferred share is convertible into 10 common shares, how many common shares are issued when 500 preferred shares are converted?
A) 500
B) 50
C) 5,000
D) 5

Question

Jacobs Corporation has the following shareholders' equity on December 31, 2014: 
-If one preferred share is convertible into 10 common shares, how many common shares are issued when 500 preferred shares are converted?
A) 500 
B) 50 
C) 5,000 
D) 5

Quizplus · Accepted Answer

Since each preferred share is convertible into 10 common shares, converting 500 preferred shares would result in 500 * 10 = 5,000 common shares.

Jacobs Corporation Has the Following Shareholders' Equity on December 31