Answer:
The 125,000 shares of common stock would be issued
Explanation:
For computing how many shares of common stock would be issued, we have to use the formula of common share produced which is shown below:
Common share produced = Par value ÷ Conversion price
where,
Par value is $5,000,000
And, the conversion is $40
Now, apply these values to the above formula
So, the value would be equals to
= $5,000,000 ÷ $40
= 125,000
The time period and rate of debentures is irrelevant, Thus, it is ignored.
Hence, the 125,000 shares of common stock would be issued.
