If You Own 500 Shares (2% of a Corporation's Stock)

question 19

Multiple Choice

If you own 500 shares (2% of a corporation's stock) and the corporation issues 15,000 new shares, how many of the new shares can you purchase under preemptive right?

• A) 500
• B) 300
• C) 800
• D) 0
• E) 100

Identify the components and implications of bond redemption transactions.

Recognize the difference between stated/contractual and market/effective interest rates.

Explain the effect of market interest rate changes on bond prices.

Understand the accounting for convertible bonds and bond conversions.