The conversion value of a convertible bond is equal to which one of the following?

Which one of the following statements related to warrants is correct?    A.  Warrants are generally issued as an attachment to publicly-issued bonds. B.  Warrants are excluded from trading on an organized exchange. C.  Warrants are structured as long-term put options. D.  Warrants are issued by individual investors. E.  Warrants are generally added as an incentive to a private debt issue. Refer to section 24.7

52.

Which of the following statements is (are) correct concerning warrants? I. Warrants are similar to put options. II. Warrants are similar to call options. III. When a warrant is exercised, the issuer is not involved in the transaction. IV. When a warrant is exercised, the issuer must issue new shares of stock.    A.  I only B.  II only C.  I and III only D.  II and IV only E.  I and IV only Refer to section 24.7

53.	When warrants are exercised, the:    A.  earnings per share decrease. B.  earnings per share remain constant. C.  total equity in a firm remains constant. D.  total equity in a firm decreases. E.  number of bonds outstanding increases. Refer to section 24.7

54.

Which of the following statements are correct concerning convertible bonds? I. New shares of stock are issued when a convertible bond is converted. II. A convertible bond is similar to a bond with a call option. III. A convertible bond should always be worth less than a comparable straight bond. IV. A convertible bond can be described as having upside potential with downside protection.    A.  I and III only B.  I, II, and IV only C.  I, II, and III only D.  I, III, and IV only E.  II, III, and IV only Refer to section 24.7

55.

The conversion value of a convertible bond is equal to which one of the following?    A.  Conversion ratio × Stock price B.  Conversion ratio × Conversion price C.  Face value of the bond/Conversion premium D.  Face value of the bond × (1 + Conversion premium) E.  Stock price × (1 + Conversion ratio) Refer to section 24.7