Audrey owns 400 shares of Widget convertible preferred stock

Audrey owns 400 shares of Widget convertible preferred stock which converts at a ratio of 5 to 1. How many shares of common stock will she receive of she converts all of her shares? a.) 80 b.) 400 c.) 2000 d.) 2400

Solution

Option (C) is the correct answer.

Conversion ratio = 5

Therefore, common share = 400*5 = 2000