When a convertible bond is called, 1. interest ceases to accrue 2. the bondholder receives the principal 3. the bondholder generally converts the bond 4. dividends are paid to the bondholder

Question 11 options:

	a)	1 and 3
	b)	1 and 4
	c)	2 and 3
	d)	2 and 4

Question 12 (2.5 points)

The value of a convertible bond as debt does not depend on

Question 12 options:

	a)	the bond's coupon
	b)	the conversion price of the bond
	c)	current interest rates
	d)	the term of the bond

Question 13 (2.5 points)

If the value of the stock rises, the value of a convertible bond falls.

Question 13 options:

	a)	True
	b)	False

Question 14 (2.5 points)

Convertible preferred stock is usually less risky to investors than the firm's convertible bonds.

Question 14 options:

	a)	True
	b)	False

Question 15 (2.5 points)

Convertible bonds sell for a premium over their 1. market price 2. value as stock 3. value as debt

Question 15 options:

	a)	1 and 2
	b)	1 and 3
	c)	2 and 3
	d)	1, 2, and 3

When a convertible bond is called, interest ceases to accrue the bondholder receives the principal the bondholder generally converts the bond dividends are paid to the bondholder Question 11 options