Which of the following are financial instruments that give rise to POS?
A)Convertible bonds that can be exchanged for cumulative preferred shares.
B)Convertible preferred shares that can be exchanged for ordinary shares.
C)Land that can be exchanged for preferred shares.
D)Stock options and warrants that permit the holder to buy preferred shares from the company at a predetermined price.

Question

Quizplus · Accepted Answer

Convertible preferred shares that can be exchanged for ordinary shares are financial instruments that give rise to potential ordinary shares (POS) because they can be converted into ordinary shares, potentially diluting existing shareholders.

Which of the Following Are Financial Instruments That Give Rise