Corporate bonds that can be exchanged for shares of the corporation’s common stock ifcertain conditions are met are calleda. callable bonds.b. equity bonds.c. convertible bonds.d. exchangeable bonds.

Corporate bonds that can be exchanged for shares of the corporation’s common stock ifcertain conditions are met are calleda. callable bonds.b. equity bonds.c. convertible bonds.d. exchangeable bonds.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4MC: A convertible bond can be converted into ________. A. preferred stock B. common stock and then...

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Question

Corporate bonds that can be exchanged for shares of the corporation’s common stock if
certain conditions are met are called
a. callable bonds.
b. equity bonds.
c. convertible bonds.
d. exchangeable bonds.

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Stockholders equity consists of which of the following? A. bonds payable B. retained earnings and accounts receivable C. retained earnings and paid-in capital D. discounts and premiums on bond payable
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 company
The cash interest payment a corporation makes to its bondholders is based on ________. A. the market rate times the carrying value B. the stated rate times the principal C. the stated rate times the carrying value D. the market rate times the principal
Equity instruments include all of the following, except * A. Preference shares B. Corporate bonds and other debt instruments issued by the entity. C. Ordinary shares D. Warrants or options that allow the holder to purchase a fixed number of ordinary shares of the issuing entity in exchange for a fixed amount of cash or another financial asset.
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1. When an entity issued bonds payable with detachable share warrants, how will share premium be computed if the share warrants are exercised by the bondholders? (Choose an answer and explain why) a. It is the balance of the share warrants outstanding. b. It is the sum of the share warrants outstanding and total par or stated value of the shares issued. c. It is the difference between the proceeds received based on the exercise price and the total par or stated value of the shares issued. d. It is the difference between the proceeds received based on the exercise price plus the share warrants outstanding and the total par or stated value of the shares issued.
In terms of public offerings of bonds, what is an indenture? A) a list of the duties of a trust company representing the bondholders' interests B) a memorandum that must be produced to describe the details of a bond offering C) a formal contract that specifies a firm's obligations to the bondholders D) a schedule of the fees charged by an underwriting company
Bonds that permit the bondholder to exchange the bonds into shares of common stock at a fixed price are called a. Callable bond b. Debenture c. Convertible bond d. Indenture
State the types of corporate bonds.
Discuss the characteristics of corporate bonds.
Also, the total interest on the corporate bond