Conversion price is usually set _______ the prevailing market price of the common stock at the time the bond issue is sold. at one half of 10% abovebelow

Question 4 10 points Conversion price is usually set the prevailing market price of the common stock at the time the bond issue is sold. at one half of O 10% O above O below Question 5 10 points Save Answer If the share price rises substantially above the conversion price, an advantage to the corporation would be: the bond would most likely be converted into common shares and the debt would not have to be repaid. The premium will rise thus resulting in higher profit the floor price would offer the investor downside protection. There is no advantage as the debt holders would convert resulting in buyers of equity at a lower stock price, and reducing the overall firm value Question 6 10 points Save Answer Ahmed and Farooq are interested in purchasing call options of a stock they think will increase in value. Ahmed and Farooq can be best classified as: Market traders Speculators OlInvestors Stock Brokers