When an Investor Converts a Bond to Stock, He Is

question 64

Multiple Choice

When an investor converts a bond to stock, he is invoking

• A)a call provision.
• B)a convertible provision.
• C)a provisional provision.
• D)a bid provision.

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Definitions:

Present Value

The contemporary valuation of a future money sum or cash flow series, based on a predetermined return rate.

Time Value

The idea that having money now is more valuable than having the same sum in the future because of its ability to generate earnings.

Money Concept

A financial principle that emphasizes the role of currency in transactions and as a measure of value in the economic system.

Net Present Value Method

A financial analysis technique that discounts all cash flows associated with a project to their present value to help assess the project's profitability.