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

1. 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