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- 23 Preferred stock is similar to a bond because: Group of answer choices all of these. it represents an ownership interest. it has a fixed amount to the investor. it has a maturity at which time the corporation repays par value.Question 25 The following is not an example of an equity instrument: Preferred stock Stock Warrant Common Stock Bond3. Which type of bonds give the holder the right to exchange the bonds at some stage in the future into ordinary shares according to some prearranged formula? A. Convertible Bonds B. Mezzanine Bonds C. High Yield Junk Bonds D. Redeemable Bonds
- 3. Convertible bonds, warrants, and other exotic bond features As the name suggests, convertible bonds allow the owner the option to convert the bonds into a fixed number of shares of common stock. Which of the following best describes the difference between a convertible bond and a warrant? Convertible bonds give the investor the option to buy shares at a certain price, whereas warrants give the investor the option to exchange bonds for shares at a certain price. Convertible bonds give the investor the option to exchange bonds for shares at a certain price, whereas warrants give the investor the option to buy shares at a certain price. Consider the case of an investor, Nazim: Nazim wants to include putable bonds in his investment portfolio. Nazim is likely to put the bonds when: He has reinvestment options with higher yields. He has reinvestment options with lower yields. Nazim also recently bought bonds with a clause stating that…12. Investments in debt securities include all of the following, except for a. U.S. treasury securitiesb. corporate bondsc. preferred stocks that are redeemable at the option of the issuerd. commercial paperQ2) Referring to the standards that mention in the table below, compare between bond and common stock. Area Bond Common Stock 1 Profile 2 Return Form 3 Risks 4 Rights 5 Par Value
- J 7 1. What are the main features of a corporate bond that would be listed in the indenture? 2. What are the differences between preferred stock and debt?5. Investments in equity securities include all of the following, except for a. common stocksb. preferred stocksc. convertible bondsd. stock optionsq5 How should the issue price of the bonds with non-detachable share warrants be accounted for?A. The proceeds are fully assigned to the bonds.B. the proceeds shall ne assigned first to the warrants, at their market value and the remained to the bonds.C. The proceeds shall be assigned first to the bonds at their market value if sold without he warrants; then the remained of the issue price is assigned to the warrants as part of equity.D. The proceeds shall be allocated to the bonds and to the warrants based on the relative fair values
- true or false 8. Public offering is the sale of a new security issue, typically bonds or preferred stock, directly to an investor or group of investors.A company issues Non-convertible bond with Equity Warrants. This security is equal to Preferred stock Call Option Convertible Bond Differential Voting Rights Equity shares1. a)For these following corporate financing type, identify the embedded option.)(i) (Right issue)(ii) (Underwrite the new securities issue)(iii) (Callable bondholder)