If the Share Price Rises Substantially Above the Conversion Price

question 32

Multiple Choice

If the share price rises substantially above the conversion price, an advantage to the corporation would be

• A) the premium would decrease.
• B) the floor price would offer the investor downside protection.
• C) the bond would most likely be converted into common shares and the debt would not have to be repaid.
• D) none of the other answers is correct

Describe the dynamic adjustment process toward long-run equilibrium in monopolistically competitive markets.

Identify the conditions under which a monopolistically competitive firm can earn zero, positive, or negative profits.

Understand the concept of imperfect competition and its variants, including monopolistic competition and oligopoly.

Understand the concept of product-variety and business-stealing externalities in monopolistic competition.

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