ZuoTi.Pro
Question

5 pts Question 8 Which one of the following terms applies to a bond that can be exchanged for the issuing companys common st
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

ANSWER:- CONVERTIBLE

JUSTIFICATION:- A convertible bond can be defined as a bond on which fixed interest is earned by the investor upto the date of conversion and the investor has an option to convert his holding in bonds into shares of the company at predetermined conversion rate.After conversion of bonds into shares the investor ceases to receive interest income from bond and becomes entitled to any dividend paid by the company.

PLEASE DON’T FORGET TO GIVE A THUMBS UP ??!!!

0 0
Add a comment
Know the answer?
Add Answer to:
5 pts Question 8 Which one of the following terms applies to a bond that can...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Which one of the following terms applies to a bond that initially sells at a deep...

    Which one of the following terms applies to a bond that initially sells at a deep discount and only makes one payment to bondholders? Callable Income Zero coupon Convertible Tax-free

  • Question 6 1 pts The issue price of a bond is: determined by the company issuing...

    Question 6 1 pts The issue price of a bond is: determined by the company issuing the bonds. based on a present value calculation. determined by the financial advisers. always equal to $1,000. Question 5 1 pts Disco World began its business on November 1 and sold contracts to twelve students for dance lessons that day. The lessons cost $375 per person for a three-month period and the students are required to pay in advance. Use the information above to...

  • Question 23 1 pts A corporate bond has an expected, total (not excess) return of 5%....

    Question 23 1 pts A corporate bond has an expected, total (not excess) return of 5%. The risk-free rate is 2% and the expected market return (total, not excess) is 10%. Which of the following is closest to the beta of the corporate bond? 0.3 0.375 0.625 0.5 2.67 Question 22 1 pts Corporation X issues three bonds, A, B, and C, with the same par value, coupon rate, seniority, and maturity. Bond A is convertible, that is it can...

  • Question 3 2 pts All else equal, which of the following relation is true? Assume all...

    Question 3 2 pts All else equal, which of the following relation is true? Assume all bonds are based on the same underlying straight bond. If it does not say that a bond is callable or convertible, then assume that it is not. For example "callable" means a regular coupon-paying bond that is callable, but not convertible. Callable < convertible < straight Straight < callable < convertible Convertible < callable < straight Callable < straight < convertible

  • QUESTION 1 Match the terms correctly - Putable Bond A Investors can exchange the bond for...

    QUESTION 1 Match the terms correctly - Putable Bond A Investors can exchange the bond for a set number of shares of common stock of the issuer. - Secured Bond ..Callable Bond . . Convertible Bond - Debenture B. Specific assets of the firm are designated as collateral for the bond. C. Investors can force the issuerto repurchase the bond at a price that is pre- specified in the bond indenture. D. A bond that does not have specific assets...

  • I Need help with this A convertible bond has the following terms: Principal of $1000, coupon...

    I Need help with this A convertible bond has the following terms: Principal of $1000, coupon interest of 7%, maturity in 10 years, callable after five years at 1070. The conversion price is $40 (25 shares). The current price of the common stock is $4 Similar risk bonds have a yield to maturity of 8%. Would it make sense to convert the bond today, not convert it, or wait a while to decide whether to convert? Why (you should use...

  • Question 8 1 pts If a bond has a Standard & Poor's rating of a BB...

    Question 8 1 pts If a bond has a Standard & Poor's rating of a BB or below, it is referred to as a investment-grade bond. zero-coupon bond. municipal bond. junk bond.

  • QUESTION 8 (16 marks) (a) [5 marks] John purchases a $1000 face value 10-year bond with coupons of 8% per annum pai...

    QUESTION 8 (16 marks) (a) [5 marks] John purchases a $1000 face value 10-year bond with coupons of 8% per annum paid half-yearly. The bond will be redeemed at C. The purchase price is $800 and the exact present value of the redemption amount C is $301.5116. Calculate the redemption amount C, and state if the bond is redeemed at par, discount or premium. (Hint: a at 3% is 14.87747 ag at 4% is 13.59033, a at 5 % is...

  • Question 15 5 pts Which one of the following bonds is the most sensitive to changes...

    Question 15 5 pts Which one of the following bonds is the most sensitive to changes in market interest rates? Zero coupon, maturing in 10 years 6 percent annual coupon, maturing in 10 years Zero coupon, maturing in 4 years 8 percent annual coupon, maturing in 4 years

  • Question 16 4 pts A bond indenture is a requirement that states the bond in question...

    Question 16 4 pts A bond indenture is a requirement that states the bond in question must be paid off in quarterly installments. e a contract between the corporate board of directors and the bondholders, stating that the board is indentured (ie, bound) to the bondholders in case of default by the corporation. a promise to bondholders to substitute preferred stock amount for the bond amount in case of corporate default. a contract between the bondholders and the corporation issuing...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT