Chapter 6.2, Problem 6.9RQ

Summary Introduction

To determine: The term convention features, call features, and stock purchase warrants.

Introduction:

Convention features: The convention features provide the bond holders to the option to convert a certain number of shares of stock.

Call features: The opportunity to repurchase bonds prior to maturity is called call features.

Stock purchase warrants: The stock purchase warrants are instruments that give their holders the right to purchase a certain number of shares of the issuer's common stock at a specified price over a certain period of time.