A Company Will Force Conversion of a Convertible Bond When

question 39

Multiple Choice

A company will force conversion of a convertible bond when:

• A) the conversion value is higher than the call price.
• B) the conversion value is higher than the par value (face value).
• C) when the total interest payment on the bond equals the total dividend payment on the converted shares of common stock.
• D) when the share price is very low.

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Definitions:

Conscience

An individual's internal moral compass, guiding distinctions between right and wrong.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior, often influenced by culture, religion, or personal beliefs.

Superego

In psychoanalytic theory, it represents the ethical component of the personality and provides the moral standards by which the ego operates.

Psychodynamic Perspectives

An approach in psychology that emphasizes unconscious psychological processes and contends that childhood experiences are crucial in shaping adult personality.