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- A convertible bond can be converted into ________. A. preferred stock B. common stock and then converted into preferred stock C. common stock of a different company D. common stock of the companyA bond that pays interest forever and has no maturity date is a perpetual bond, also called a perpetuity or a consol. In what respect is a perpetual bond similar to (1) a no-growth common stock and (2) a share of preferred stock?Preference shares have characteristics similar to bonds because it ______________ A. has a fixed monthly rate. B. has a fixed dividend amount. C. represents the ownership of the company. D. has no fixed dividend amount.
- If given the original value (par value) and market price (the price the bond sold for), how do youknow if the bond is being issued at a discount or a premium? 2. As an investor, would you want to buy a bond at a discount or premium? Explain the reasoningbehind your choice. 3. Explain how a company's Income Statement is affected by treasury stock transactions?Which one of the following terms applies to a bond that can be exchanged for the issuing company's common stock in the future? Group of answer choices Callable Municipal Zero coupon ConvertiblePreferred stock is a special form of stock having a fixed periodic dividend that must be paid prior to payment of any interest to outstanding bonds. Is this true or false?
- Preferred stock may have all of the following characteristics in common with bonds with the exception of Select one: A. a possible conversion option into common stock B. tax-deductible payments C. annuity payments D. the lack of voting rights E. a fixed liquidation valueA preferred stock has a fixed dividend and a priority status over other equity securities?Select one:TrueFalse________ are promised a fixed periodic dividend that must be paid prior to paying any common stock dividends. A) Preferred stockholders B) Common stockholders C) Bondholders D) Creditors Which of the following is typically a feature of common stock? A) Most common stocks are callable. B) Most common stocks are cumulative. C) Common stocks have a maturity value. D) Common stocks may or may not pay dividends.
- Defining common stock yield and its importance to investors Define and explain a bond yield's importance. What makes a stock investor different from a bond investor? What are their expectations? What are investors' alternatives if no common dividend is paid? What alternatives do bondholders have if interest payments are missed?Which of the following characteristics accurately describes the stock market? An active market that determines the price of a firm’s shares A fixed-income market where participants buy and sell debt securities The bid-ask spread in a dealer market represents the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread? The difference between the closing price of the security and the opening price of the security on the day of the transaction. The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. Fernando, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Ally, is willing to sell 1,500 shares of the same stock. Unfortunately, Fernando…Do preferred stockholders receive the share of the company earnings before or after bond interest is paid?