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.

---

Definitions:

Original Cost

The initial price paid to acquire an asset before any depreciation or amortization.

Net Income

The earnings a company retains following the deduction of all costs and taxes from its overall income.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use, subtracted from its original cost on the balance sheet.

Delivery Truck

A vehicle used by businesses primarily for transporting goods to customers or between locations.