Which statement is false?

a) A convertible bond gives the bondholder the right to exchange their bonds for a preset number of shares of stock.

b) A right is a bond with a call option held by the bondholder and thus has a higher price and a lower yield than similar bonds.

c) Most preferred stock is owned by other companies due to the 70% exclusion of dividends.

17. A firm has Net Income of 200,000 and 50,000 shares of common stock outstanding. However, they have 10,000 shares of Preferred Stock which received $2 per share in dividends. They also had warrants that can be converted into 20,000 shares of common stock for $25. Their current stock price is $30. They also have 600 bonds with a face value of 1,000 and a coupon rate of 6%. These bonds can be converted into15,000 shares of stock. Their marginal tax rate is 40%. What is their Primary EPS available to common shareholders?

a) $2.37 b) $3.38 c) $4.17

15.

_______________ are when the firm announces that they will but back stock at various times over the next several years.

a) Stock Dividends

b) Open Market Repurchases

c) Dividend Reinvestment Plans