Which of the Following Is Not a Characteristic of Convertible

question 53

Multiple Choice

Which of the following is not a characteristic of convertible bond issues?

• A) The average size of the offering is small.
• B) A 15-20% conversion premium at the time of issue is common.
• C) Large companies with billions of dollars in sales and assets are the primary issuers.
• D) Primary issuers tend to have less than AAA bond credit ratings.

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Definitions:

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Perpetual Inventory System

An inventory accounting technique that instantly logs the sale or acquisition of inventory using computerized point-of-sale systems and enterprise asset management software.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.

Physical Inventory Count

A process of counting actual inventory to verify the quantity on hand, usually performed at the end of an accounting period.