Matching
Match the following with the items below:
Premises:
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities and warrants.
May be exchanged with the company, usually for shares of common stock.
Equals the conversion ratio divided into the par value.
May be used as a means to offer lower interest rates on debt.
The use of an equity option to facilitate sale of a debt security.
Equals the market value of the common stock minus the option price of the warrant all multiplied by the number of shares each warrant entitles the holder to purchase.
The market price of the warrant minus the warrant's intrinsic value.
Equals the market price of a convertible bond minus the security's theoretical value.
The right to sell an asset for a given time at a specified price.
Responses:
put option
financial sweetener
minimum warrant value
diluted earnings per share
conversion premium
conversion price
speculative warrant premium
convertible security
warrant
Correct Answer:
Premises:
Responses:
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities and warrants.
May be exchanged with the company, usually for shares of common stock.
Equals the conversion ratio divided into the par value.
May be used as a means to offer lower interest rates on debt.
The use of an equity option to facilitate sale of a debt security.
Equals the market value of the common stock minus the option price of the warrant all multiplied by the number of shares each warrant entitles the holder to purchase.
The market price of the warrant minus the warrant's intrinsic value.
Equals the market price of a convertible bond minus the security's theoretical value.
The right to sell an asset for a given time at a specified price.
Premises:
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities and warrants.
May be exchanged with the company, usually for shares of common stock.
Equals the conversion ratio divided into the par value.
May be used as a means to offer lower interest rates on debt.
The use of an equity option to facilitate sale of a debt security.
Equals the market value of the common stock minus the option price of the warrant all multiplied by the number of shares each warrant entitles the holder to purchase.
The market price of the warrant minus the warrant's intrinsic value.
Equals the market price of a convertible bond minus the security's theoretical value.
The right to sell an asset for a given time at a specified price.
Responses:
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