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
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
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
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 |
Expert Solution
Step 1
1) Callable Bond is a derivative which gives the issuer the right to redeem the bond before bond's maturity. This right is exercised by the bond issuers
2) Debenture is a type of financing which is issued by companies to obtain long-term financing without providing collateral for the debt raised.
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