Exam 13: Security Structures and Determining Enterprise Values

Which of the following offers the option where the dividend obligation can be satisfied in cash or by issuing additional par amounts of the preferred security?

Which of the following is an example of a put option which is in the money?

A warrant is a type of call option.

The Black and Scholes model requires an exercise price as an input.

Entity valuation allows us to answer the question of how much debt a venture needs to issue to achieve a target capital structure (D/V).

A European-Style Option may only be exercised on a specific date.

A warrant is a call option issued by a company granting the holder the right to buy common stock at a specific price at a specific time.

Which of the following provides the option to transform preferred stock into common stock?

An option that can be exercised only at a specific set of dates is called a:

The unadjusted Black and Scholes model is a model for determining the value of a warrant to buy a new share.

Generally speaking,warrants are call options that allow the holder to purchase what type of security at a specific price?

Which of the following are components of common equity?

By issuing preferred stock,and thus forfeiting bankruptcy rights from the use of debt,the venture and its investors can benefit by committing to an internal reorganization as opposed to bankruptcy reorganization.

Convertible debt has all of the following except:

The right for existing owners to maintain their ownership share by purchasing sufficient shares to keep their percentage share of the firm is called:

Convertible debt is debt that converts into preferred stock.

The Black and Scholes model is intended to be used to value