Why do convertible bonds referred to as potential common shares?

Q: What is the role of a surety company

A: Bonds are a kind of loan given to a company and interest is paid by the company and face value on…

Q: What is listed stock?

A: It is one significant component of capital market. It is a organized market for buying and trading…

Q: Who Issues Bonds?

A: A bond is a fixed income instrument. The bond holders are referred to as the debt holders or…

Q: When can shares be Forfeited?

A: Shares are issued by the company to the public for ownership in the company The shares have an…

Q: Which one of the following terms applies to a bond that can be exchanged for the issuing company's…

A: Convertible bond or convertible debt is a type of bond that the bond holder can convert the bond…

Q: What are the more recently issued (and more frequently traded) bonds called? Why do investors favor…

A: The more recently issued (and more frequently traded) bonds are called Treasury Bonds which are…

Q: Why would a company choose to issue bonds instead of issuing stock?

A: Concept:

Q: How does preferred stock differ from common stock?

A: Capital Stock of CorporationCapital stock is issued by the corporation to raise funds from the…

Q: to a bond holder than a

A: Investors are offered with opportunities to invest in different types of debt instruments. They have…

Q: A convertible bond can be converted into ________. a. common stock of a different company b. common…

A: A bond is a loan that a business has obtained. The business obtains funding from investors who…

Q: What does the treasury stock method, “proceeds” include?

A: Earnings per share (EPS): The amount of net income available to each shareholder per common share…

Q: What is the difference between a Corporate Stock and a Corporate Bond?

A: Corporate Stocks are represents as equity portion of the issuing corporation. Owners of Corporate…

Q: Why do some financial analysts treat preferred stock as a special type of bond rather than as an…

A: Preferred stock refers to the type of financial asset that are between equity and debt asset.…

Q: How are convertible bonds are handled when calculating WACC?

A: A convertible bond is a type of corporate bond that gives the bondholder the option to convert the…

Q: What are the advantages of holding stock in a company versus holding bonds issued by the same…

A: Stock is a security that represents the ownership of the fraction of a corporation. Bond is a debt…

Q: What does it mean when a company calls a bond?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What are the risks associated with stocks that may not be also in bonds?

A: The question is based on the concept of different types of risk associated with different financial…

Q: Explain why preferred stock is considered to be a hybrid of equity and debt securities?

A: Preferred stock is a hybrid of equity and debt securities because it combines characteristics of…

Q: What are the pros and cons of a company’s decision to issue stock versus issuing bonds?

A: Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money…

Q: What are the similarities and differences between warrants and convertible bonds?

A: Warrants are derivatives that give power to buy or sell any security within a period of time. It can…

Q: how are convertible bonds measured initially on the balance sheet

A: Convertible bonds are a combination of Financial and Liability component. Therefore these are…

Q: In what ways does an MTN differ from a corporate bond? b. What derivative instrument is commonly…

A: The question is based on the concept of financial analysis.