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2 years ago

A convertible bond would let the investor exchange it for:____.

Business

1 answer:

worty [1.4K]2 years ago

3 0

A convertible bond would let the investor exchange it for common stock

What is a convertible bond?

A convertible bond allows the investors (lender) to exchange the bond for something else within a given time under any conditions specified in the bond indenture.

How does a convertible bond work?

A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares. The conversion from the bond to stock happens at specific times during the bond's life and is usually at the discretion of the bondholder.

Common stock :

Common stock is a security that represents ownership in a corporation. In a liquidation, common stockholders receive whatever assets remain after creditors, bondholders, and preferred stockholders are paid. There are different varieties of stocks traded in the market.

Learn more about common stock :

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For each item listed below, indicate the effect on net income in arriving at cash flows from operations by choosing one of the f

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3 years ago

A project will produce an operating cash flow of $56,200 a year for 5 years. The initial fixed asset investment in the project w

Lelu [443]

Answer :

Net present value = -$18,375

Explanation :

As per the data given in the question,

Initial investment = $239,800

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So present value of operating cash flow :

PMT = $56,200

N = 5 years

Rate = 15.2%

FV = $0

Now applying the formula

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The present value comes $33,023

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3 years ago

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It would most likely it would be false

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3 years ago

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Helen [10]

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A municipal bondholder buys a 5 percent coupon annual payment muni bond at a price of $4,900. The bond has a $5,000 face value.

AURORKA [14]

Answer:

6.4%

Explanation:

we need to divide this investor's income in two parts:

dividends are not taxed = $5,000 x 5% = $250
capital gains = (selling price - basis) x (1 - tax rate) = ($4,975 - $4,900) x (1 - 15%) = $75 x 85% = $63.75

total after-tax gains = $250 + $63.75 = $313.75 / $4,900 = 0.064 ≈ 6.4%

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3 years ago