Exam 24: The Many Different Kinds of Debt

The Alfa Co.has a 12% bond outstanding on a $1,000 face value bond that pays interest on February 1^st and July 1^st.Today is March 1^st and you are planning to purchase one of these bonds.How much will you pay in accrued interest?

A $1,000 face value bond can be exchanged any time for 25 shares of stock. Then the conversion price is:

Affirmative covenants impose certain duties on the company.

Corporations typically have the right to repurchase a debt issue prior to maturity at a fixed price.Such debt issues are said to be:

Long-term bonds that are unsecured obligations of a company are called:

Which of the following statements about convertible bonds is (are)true?

The written agreement between a corporation and the bondholder's representative is called the:

Briefly explain the term conversion premium.

Which of the following bonds is typically secured?

In general,which of the following statements is true?

The Alfa Co.has a 6% coupon bond outstanding that pays annual interest.Calculate the annual interest payment on a $1,000 face value bond.

Any bond that is issued at a discount is known as:

The owner of a convertible bond owns both a straight bond and a call option.

Discuss the valuation of a convertible bond.

The following are various types of secured debt: I.mortgage bonds; II.collateral trust bonds; III.equipment trust certificate; IV.debentures

A type of bond that has the advantage of secrecy of ownership,but has the disadvantage of ownership not recorded by the firm's registrar,is a:

LYONs are bonds that are: i.callable; II)puttable; III)convertible; IV)zero-coupon

Even though many bonds have deferred sinking funds,the sinking fund has the following effects on bondholders: I.provides extra protection to bondholders as both an early warning system and perhaps some collateral cash; II.provides an option to the firm to buy bonds at the lower of market or face value; III.puts the bondholders at added risk due to potential inability to meet sinking fund payments