Question
QUESTION 8 Which of these statements is true about a conversion feature? A: a bond with a conversion feature means that it has warrants B:
QUESTION 8 Which of these statements is true about a conversion feature?
A: a bond with a conversion feature means that it has warrants
B: the bond indenture allows the investor, at their option, to cash in the bond before maturity
C: it allows for exchanging the bond for shares of the firms stock at a fixed price
D: the fixed coupon can become variable upon the exercising of the conversion feature
QUESTION 11
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The intrinsic value of a common stock is the
A: result of the bidding-auction process in the market
B: the present value of future expected cashflows
C: the par value of the common stock times the number of shares issued (outstanding)
D: the value of the common stock as reflected on the firm's "common stock" account in the balance sheet
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