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Vilka [71]
1 year ago
10

When convertible bonds are first issued I. the conversion price of the stock is higher than the market price. II. the market pri

ce of the stock is higher than the conversion price. III. the coupon rate is higher than if the bond were not convertible. IV. the coupon rate is lower than if the bond were not convertible.
Business
1 answer:
yulyashka [42]1 year ago
3 0

<em>When convertible bonds are first issued </em>

  • <em> the conversion price of the stock is higher than the market price.</em>
  • <em>the coupon rate is lower than if the bond were not convertible.</em>
<h3>Why are convertible bonds issued?</h3>

Convertible bonds are issued by businesses to reduce their debt's coupon rate and postpone dilution. The number of shares an investor will receive in exchange for a bond depends on its conversion ratio. If the stock price is higher than if the bond were to be redeemed, companies can force the conversion of the bonds.

<h3>What is a convertible bond?</h3>

An interest-bearing fixed-income corporate debt asset known as a convertible bond has the option of being converted into a predetermined number of shares of common stock or equity. During the bond's term, the conversion from bond to stock is possible at specific times and is often at the bondholder's option.

<h3>What benefits do convertible bonds offer?</h3>
  • The interest expense reductions from convertible bonds can be substantial.
  • Convertible bonds often have lower interest rate payments than straight corporate bonds.
  • The conversion option gives investors the chance to profit from gains in stock price, so they accept the reduced interest payments. May 10, 2021.

learn more about convertible bonds here <u>brainly.com/question/14954723</u>

<u>#SPJ4</u>

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solong [7]

Answer:

(attached graph)

The increase in the ticket price makes the budget line slope to decrease. There will be less ticket available for Alphonso.

The increase in the bus tickets makes the opportunity cost of the hamburger to decrease as now, consuming an hamburger will make Alphonso renounce to a lesser amount of bus tickets. As the the opportunity cost is the goods or services we don't consume in favor for those we do.

Explanation:

4 0
3 years ago
If the Fed wanted to use all four of its major monetary policy control tools to increase the money supply it would _____.
Georgia [21]

Answer:

sell bonds, increase discount rates and increase reserve requirements

Explanation:

The Federal Reserve’s three instruments of monetary policy are open market operations, the discount rate and reserve requirements ( Sometimes discount rate management is divided as discount and interest rate) .

Open market operations involve the buying and selling of government securities. The term “open market” means that the Fed doesn’t decide on its own which securities dealers it will do business with on a particular day. Rather, the choice emerges from an “open market” in which the various securities dealers that the Fed does business with – the primary dealers – compete on the basis of price. Open market operations are flexible, and thus, the most frequently used tool of monetary policy.

The discount rate is the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans.

Reserve requirements are the portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank.

7 0
3 years ago
Marston Manufacturing Company has two divisions, L and H. Division L is the company’s low-risk division and would have a weighte
uysha [10]

Answer:

Should Marston Manufacturing Company accept or reject the project?

Marston C Company should reject the project because its expected return is lower than Division H's cost of capital.

Since the divisions' risk is so different, and probably their projects are also very different, the company should use different costs of capital to accept of reject the projects based on each division's cost of capital.

Imagine another situation where Division L is evaluating a project that yields 10%. If they used the company's WACC, then they should reject the project, but if they used the division's cost of capital, then they should accept the project (in this case I would recommend accepting it).

Explanation:

Division H's risk = 14%

Division L's risk = 8%

WACC = 11%

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3 years ago
George is going shopping for a new car to replace his old one. Which of these costs would be
uranmaximum [27]

The cost that would relevant in the choice of a new car is the the cost to operate the new vehicles.

<h3>What cost would be relevant?</h3>

The cost that would be relevant in the choice of a new car is the cost that is dependent on the type of car chosen. The cost to operate the new car would depend on the type of car chosen. If George buys a more fuel efficient car, the cost of running the car would be cheaper.

To learn more about cost, please check: brainly.com/question/27127934

4 0
2 years ago
In 2005, BridgePort Brewing Company expanded sales of its BridgePort India Pale Ale, and BridgePort Black Strap Stout into Alaba
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Answer: organizing

Explanation:

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First and foremost, we should note that the management functions usually include:

• planning,

• organizing,

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• controlling.

The organizational skills is vital in order for the company to runs smoothly. Organizing has to do with the establishment of internal processes in order to know the workers that fits a particular position.

Also, the management makes sure that everyone are organized and that workers are working hard towards the accomplishment of company's goals.

7 0
2 years ago
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