When Convertible Bonds Are First Issued

question 11

Multiple Choice

When convertible bonds are first issued
I. the conversion price of the share is higher than the market price.
II. the market price of the share is higher than the conversion price.
III. the coupon rate is higher than if the bond were not convertible.
IV. the coupon rate is lower than if the bond were not convertible.

• A) I and III only.
• B) II and IV only.
• C) II and III only.
• D) I and IV only.

---

Definitions:

Gonadotropin-Releasing Hormone

A hormone secreted by the hypothalamus that stimulates the anterior pituitary to release gonadotropins, influencing reproductive functions.

Anterior Pituitary

The front portion of the pituitary gland, which produces and releases hormones that regulate various bodily functions including growth, reproduction, and metabolism.

Corpus Luteum

The temporary endocrine tissue in the ovary that develops from the ruptured follicle after ovulation; secretes progesterone and estrogen.

Secondary Spermatocyte

A cell that arises from the division of a primary spermatocyte and will undergo meiosis II to produce spermatids.