Statements regarding convertible bonds

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Reference no: EM132030510

1. Which of the following statements regarding Convertible Bonds is INCORRECT?

A. Convertible bonds generally have lower yield than otherwise similar non-convertible bonds.

B. Convertible bonds generally have lower yield than otherwise similar Callable bonds.

C. Convertible bond holders can choose to convert their bonds into stocks at a pre-determined ratio.

D. Convertibility provision is a favorable option to bond holders.

E. Issuers can choose to retire Convertible bonds prior to maturity.

2. A payment made by a firm to its owners in the form of new shares of stock is called a ___________ dividend.

A. stock

B. extra

C. liquidating

D. normal

E. special

Reference no: EM132030510

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