The Conversion Ratio for a Convertible Bond Equals The

question 41

Multiple Choice

The conversion ratio for a convertible bond equals the:

• A) number of interest payments that must be received prior to conversion.
• B) number of bonds necessary to convert into one share of stock.
• C) number of shares of stock that can be exchanged for one bond.
• D) floor value beneath which the bond price cannot fall.

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Definitions:

Regulated Monopolies

Market situations in which local, state, or federal government grants exclusive rights in a certain market to a single firm.

Economic Recession

a period of temporary economic decline characterized by a decrease in GDP, income, employment, and trade, typically lasting from six months to a year.

Communism

Economic system in which all property would be shared equally by the people of a community under the direction of a strong central government.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information, leading to firms being price takers.