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3 March, 02:29

True/False

The conversion price divided into the market value of a convertible bond provides the conversion ratio.

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Answers (1)
  1. 3 March, 02:42
    0
    False

    Explanation:

    The formula to compute the conversion ratio is shown below:

    Conversion ratio = Par value of convertible security : conversion price

    The conversion ratio is computed by dividing the par value of convertible security or bond by the conversion price. The example is presented below:

    Example: The par value is $1,000 and the conversion price is $20, so the conversion ratio is 50

    Hence, the given statement is false
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