Matching
Match the following with the items below:
Premises:
Occurs when a company calls a convertible security that has a conversion value greater than the call price.
Equals the conversion ratio multiplied by the market price per share of common stock.
Equals earnings after taxes divided by shares outstanding.
Is usually equal to the pure bond value.
May be traded in to the company for a different form of security.
This feature, when written into the contract, allows the conversion ratio to decline over time.
The right to buy an asset for a given time at a specified price.
The number of shares an investor will receive if he or she exchanges a convertible bond for common stock.
Sometimes used as a financial sweetener in a bond offering.
The value of a convertible bond if its present value was computed at a discount rate equal to interest rates on straight bonds of equal risk without conversion privileges.
Responses:
conversion ratio
convertible security
floor price
forced conversion
basic earnings per share
warrant
step-up in conversion price
conversion value
a call
pure bond value
Correct Answer:
Premises:
Responses:
Occurs when a company calls a convertible security that has a conversion value greater than the call price.
Equals the conversion ratio multiplied by the market price per share of common stock.
Equals earnings after taxes divided by shares outstanding.
Is usually equal to the pure bond value.
May be traded in to the company for a different form of security.
This feature, when written into the contract, allows the conversion ratio to decline over time.
The right to buy an asset for a given time at a specified price.
The number of shares an investor will receive if he or she exchanges a convertible bond for common stock.
Sometimes used as a financial sweetener in a bond offering.
The value of a convertible bond if its present value was computed at a discount rate equal to interest rates on straight bonds of equal risk without conversion privileges.
Premises:
Occurs when a company calls a convertible security that has a conversion value greater than the call price.
Equals the conversion ratio multiplied by the market price per share of common stock.
Equals earnings after taxes divided by shares outstanding.
Is usually equal to the pure bond value.
May be traded in to the company for a different form of security.
This feature, when written into the contract, allows the conversion ratio to decline over time.
The right to buy an asset for a given time at a specified price.
The number of shares an investor will receive if he or she exchanges a convertible bond for common stock.
Sometimes used as a financial sweetener in a bond offering.
The value of a convertible bond if its present value was computed at a discount rate equal to interest rates on straight bonds of equal risk without conversion privileges.
Responses:
Related Questions
Q88: A contract giving the owner the right
Q89: Fred Jury is a portfolio manager who
Q90: The following benefits occur to the corporation
Q91: A warrant which does not expire until
Q93: All of the following are advantages to
Q94: The Whipple Corporation currently has common stock
Q95: Options contracts contrast with futures because
A) options
Q96: Lucky Dog Pet Food has a $1000
Q98: Match the following with the items below:
Q100: The XLarge Corporation has a convertible bond
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents