BUSI 420 Read & Interact Jordan, Miller Jr., & Dolvin Chapter 18 solutions complete answers

BUSI 420 Read & Interact Jordan, Miller Jr., & Dolvin Chapter 18 solutions complete answers

 

The number of common stock shares acquired in exchange for each converted bond is called the ________.

 

Cash flows associated with a plain vanilla bond are _______.

 

A        is a document prepared as part of a security offering detailing information about a company's financial position, operations, and investment plans.

 

True or false: A debenture has a specific asset pledged as security for the loan.

 

An issuer would be most likely to call a bond when interest rates        (increase/decrease).

 

A convertible bond with a $1,000 par value and a conversion ratio of 25 would have a conversion price of $      .

 

True or false: Most corporate bonds contain a call feature.

 

The formal written agreement between the corporation and the bond holders is the bond _________.

 

Assume a firm has two debentures outstanding. In the absence of any contracted priority, the debenture issued ________ will carry priority.

 

Replacing existing bonds with new bonds is called bond       .

 

Which of the following is a the best action to take for the owner of a convertible bond?

 

True or false: The floor value of a convertible bond is its conversion value.

 

The indentures of many term bonds include a        fund provision, which requires the borrower to make periodic payments into an account for purposes of redeeming a portion of the outstanding bonds.

 

Assume a bond indenture states, "The firm must periodically supply audited financial statements to bondholders." This is an example of a _______ covenant.

 

Adjustable-rate bonds are also called _____-rate bonds.

 

True or false: An investor should redeem a convertible bond as soon as the conversion value exceeds the straight bond value.

 

The price below which a convertible bond cannot fall, equal to the value of a comparable nonconvertible bond is called the        bond value.

 

A sinking fund is an account used to provide for _____ redemptions of outstanding bonds.

 

Which of the following is not a type of protective covenant?

 

Securities that pay coupons that change according to a prespecified rule are called _____-rate bonds.

 

Which of the following is a marketable security?

 

True or false: The U.S. federal government is the largest single borrower in the world.

 

The STRIPS program allows brokers to divide Treasury bonds and notes into which two of the following?

 

True or false: The binomial spread is the difference between a dealer's ask and bid prices.

 

True or false: In a Treasury auction, competitive bids specify a quantity, while noncompetitive bids specify both a price and quantity.

 

Government agency bonds generally have        (higher/lower) yields then comparable Treasury bonds.

 

True or false: Treasury STRIPS are effectively zero coupon bonds and are thus often called zeroes.

 

Which of the following measures the dealer's gross profit from a single round-trip transaction of buying a security at the bid price and then selling it at the ask price?

 

In a Treasury auction, all winning bidders pay the _________.

 

Trading agency bonds is ____ trading Treasury bonds.

 

True or false: Because municipal bonds carry higher risk than Treasury bonds, they always have a higher YTM.

 

The interest-bearing obligations of state and local governments are called        bonds.

 

Municipal bonds pay       (semiannual/annual) coupons.

 

Municipal bonds are most attractive to investors who are in a _____ income tax bracket.

 

True or false: Bond credit ratings are assigned to issuers, so all bonds from the same issuer will carry the same credit rating.

 

Which of the following is not another name used for speculative-grade bonds?

 

Most municipal bonds have a face value of ______.

 

An equivalent taxable yield depends on an investor's _____ tax rate.

 

Bonds with low credit ratings are called       -grade bonds.

 

Junk bonds that were originally issued as investment grade are called        angels.