A Convertible Bond Has an Option Value Which Is Equal

question 31

Multiple Choice

A convertible bond has an option value which is equal to:

• A) the market value of the convertible bond minus the straight bond value.
• B) the market value of the convertible bond minus the conversion value.
• C) the market value of the convertible bond minus the conversion premium.
• D) the market value of the convertible bond minus the maximum of the straight bond value or conversion value.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand in a business for making minor, immediate purchases or reimbursements.

Accounts Payable

Liabilities representing amounts owed by a company to creditors for goods and services received.

Petty Cash Fund

A small amount of cash on hand used for covering minor or incidental expenses within a business.

Petty Cash Receipt

A document used to record small, miscellaneous expenses paid with petty cash funds.