Which of the Following Is/are True Concerning Convertible Bonds or Convertible

question 172

Multiple Choice

Which of the following is/are true concerning convertible bonds or convertible preferred stock?

• A)Convertible bonds and convertible preferred stock permit the owner either to hold the security as a bond or preferred stock or to convert the security into shares of common stock.
• B)The owner cannot detach and transfer, or separately exercise, the conversion option.
• C)The issue price of a convertible bond or convertible preferred stock is payment for both debt or preferred stock and for the conversion option, but no one can observe the fair value of these separate components.
• D)choices a and b, only.
• E)choices a, b, and c.

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