QUESTION 1

What are the pros and cons of convertible bonds to a bond investor? Under what conditions would you favor buying convertibles over straight bonds? Why might you favor buying straight bonds over convertibles?

Please provide a thorough explanation. Thank you!

QUESTION 2

A host of empirical evidence indicates that the gains from a typical merger accrue to the shareholders of the target corporation, not to the shareholders of the acquiring corporation. It seems the acquiring corporation should be in the "driver's seat" in a typical merger. Why do shareholders not benefit? What do you think typically goes wrong to cause this result? Must use the Wall Street Journal, and cite a specific example to support position.

Please provide a thorough explanation. Thank you!