Question

Question 1 Selection: ________

A convertible security is almost always:

1. a) a security that can be converted into any other type of security.

2. b) a debt security that can be converted into preferred shares.

3. c) a security that can be converted into common shares at the holder's option.

4. d) a security that can be converted into common shares at the option of the issuing

   corporation.

Question 2 Selection: ________

Leasing is a popular form of financing because:

1. a) lease provisions are generally less restrictive than a bond indenture.

2. b) the lessor likely does not have experience with the equipment being leased.

3. c) the lessee may be financially able to purchase.

4. d) the lease is slower to finalize then a bond.

Answer 1

Ans 1) c) a security that can be converted into common shares at the holder's option.

A convertible security is almost always a security that can be converted into common shares at the holder's option.

Ans 2) a) lease provisions are generally less restrictive than a bond indenture.

Leasing is a popular form of financing because lease provisions are generally less restrictive than a bond indenture.