In the October 26, 1992, prospectus summary of the Staples 5% convertible subordinated debentures due 1999, the offering stated: "Convertible into Common Stock at a conversion price of $45 per share . . ." If the par value is $1
000, what is the conversion ratio?
Let us rearrange the equation for conversion price to solve for the conversion ratio. We have:
conversion price = ? conversion ratio = .
Inserting in our given values, we have:
conversion ratio = = = 22.22.
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