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In: Finance

1.   A ___ gives the bondholder the right, but not the obligation, to sell/exchange the ___...

1.   A ___ gives the bondholder the right, but not the obligation, to sell/exchange the ___ for a pre-specified number of shares of the issuing firm's stock.
        Call option; bond
Callable bond; bond
        Convertible bond; bond
        Convertible bond; stock

2.   ___ is the amount by which the call price exceeds the ___ of a callable bond.
        Call premium; face value
        Conversion price; current stock price
        Call premium; conversion ratio
        Conversion premium, current stock price
        Conversion premium, face value

3. ___ is the rate by which the conversion price of a callable bond exceeds the ___ .
        Call premium; face value
        Conversion price; current stock price
        Call premium; conversion ratio
        Conversion premium, current stock price
        Conversion premium, face value

Solutions

Expert Solution

A ___ gives the bondholder the right, but not the obligation, to sell/exchange the ___ for a pre-specified number of shares of the issuing firm's stock.
        Call option; bond
Callable bond; bond
        Convertible bond; bond = correct answer
        Convertible bond; stock

2.   ___ is the amount by which the call price exceeds the ___ of a callable bond.
        Call premium; face value = correct answer
        Conversion price; current stock price
        Call premium; conversion ratio
        Conversion premium, current stock price
        Conversion premium, face value

3. ___ is the rate by which the conversion price of a callable bond exceeds the ___ .
        Call premium; face value = correct answer
        Conversion price; current stock price
        Call premium; conversion ratio
        Conversion premium, current stock price
        Conversion premium, face value

go through it. give posititve feedback. THANK YOU

jeff jeffy answered 1 year ago
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