Convertibles, Exchangeables, and Warrants

A $1,000 par-value convertible bond is selling at $1,200. If the conversion ratio is 20, what is the conversion price?

• $38.46

• $41.60

• $50.00

• $60.00

The market price of a convertible security minus its conversion value is known as the __________.

• Premium conversion

• General conversion

• Straight conversion

• Option conversion

______ is a relatively long-term option to purchase common stock at a specified exercise price over a specified period of time

• Straight Bond Value

• Converted  Bond

• Exchangeable Bond

• Warrant

The value is derived from stock is called

• Convertible Security

• Derivative security

• Conversion Price

• Convertible Bond Value

Warrants are referred to as complementary packages because

• we need to maintain obligation

• we need to obtain capital gain chance.

• A and B are correct

• A is correct and B is incorrect

MArket value of a preferred stock is $200/share and conversion value is &100/share, thus the preium conversion will be ___

• $200/share of premium stock

• $300/share of premium stock

• $100/share of premium stock

• None is correct

To protect stockholder from the changeable conversion price, a ___ feature is needed

• conersion price

• conversion value

• antidilution

• dilution

Par value is divided by conversion ratio is called as___

• Conversion price

• Conversion value

• Conversion ratio

• Conversion rate

Straight bond value minus conversion value is___

• Option value

• Option price

• Option rate

• None is correct

Interest rate, firm risk, and time changes are effecting to obligation

• unconvertible bond value.

• convertible bond value.

• convertible bond value and convertible bond value.

• All is correct