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Assume a Bond Had a Conversion Price of $40 and a Conversion

Question 50

Multiple Choice

Assume a bond had a conversion price of $40 and a conversion ratio of 25.What would be the conversion ratio and conversion price if the bond issuer declared a stock split of 4-for-1?


A) 2.50; $400
B) 100; $10
C) 25; $40
D) 6.25; $160
E) 100; $25

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