You own a bond with a face value of 

​$100 comma 000.00100,000.00 

and a conversion ratio of 

500500. 

What is the conversion​ price?

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Part 1

The conversion price for this bond is 

​$enter your response here. 

 ​(Round to the nearest​ cent.)

The conversion price of a bond is calculated by dividing the bond's face value by the conversion ratio. 

Given:
- Face value of the bond = $100,000.00
- Conversion ratio = 500

The formula for the conversion price is:

\[
\text{Conversion Price} = \frac{\text{Face Value}}{\text{Conversion Ratio}}
\]

Substituting the values:

\[
\text{Conversion Price} = \frac{100,000.00}{500} = 200.00
\]

Thus, the conversion price is **$200.00**.

Would you like further details or have any questions?

Here are 5 related questions to expand on the topic:
1. How is the conversion ratio of a bond determined?
2. What factors affect the decision to convert a bond to stock?
3. How does the conversion price relate to the bond’s market value?
4. What is the difference between a convertible bond and a traditional bond?
5. How do interest rates impact the value of a convertible bond?

**Tip:** The conversion price gives an idea of how much you're paying for the stock when converting the bond.

You own a bond with a face value of $100,000.00 and a conversion ratio of 500. What is the conversion price? (Round to the nearest cent.)

Learn how to calculate the conversion price of a bond with a face value of $100,000 and a conversion ratio of 500. This finance problem explains the formula used to determine the conversion price, key concepts related to convertible bonds, and provides a step-by-step solution.

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