Question

Bonds that may be exchanged for common stock at the option of the bondholders are called

a. options.

b. stock bonds.

c. convertible bonds.

d. callable bonds.

Secured bonds are bonds that

a. are in the possession of a bank.

b. are registered in the name of the owner.

c. have specific assets of the issuer pledged as collateral.

d. have detachable interest coupons.

Which of the following is not an advantage of issuing bonds instead of common stock?

a. Stockholder control is not affected.

b. Earnings per share on common stock may be lower.

c. Income to common shareholders may increase.

d. Tax savings result.

A $1,000 face value bond with a quoted price of 97 is selling for

a. $97

b. $907.

c. $970.

d. $1,000.

A bond with a face value of $200,000 and a quoted price of 102⅛ has a selling price of

a. $240,225.

b. $204,025.

c. $200,225.

d. $204,250.

Answer 1

Answers :

1. C) Convetable Bonds

2.C) Have Specifice asset of the issuer Pledged asCollateral

3.B) Earnings Per share on common Stock May be lower.

4.C) $970

5. D)$204,250

1) Bond Which is a option to convert into common stock is known as Convertable Bonds.

2) Secured bond is types of bond which is issued with a collateral security with the firm fixed asset to the bond issues

3) Earnings Per share on common stock my be lower is not an advantage to issue bonds Instead of Common Stock.

4) Issue value of the Bond : Face value $1,000 Issue at 97 = Issue value = $1,000*0.97 = $970

5) Issue Value of theBond : Face Value $200,000 Issue At 102.125 = Issue Value = $200,000*1.02125 = $204,250