ch16 zuvio quizzes 1.docx - 1 Convertible bonds a have priority over other indebtedness b are usually secured by a first or second mortgage c pay

ch16 zuvio quizzes 1.docx - 1 Convertible bonds a have...

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1.Convertible bonds a.have priority over other indebtedness.b.are usually secured by a first or second mortgage.c.pay interest only in the event earnings are sufficient to cover the interest.d.may be exchanged for equity securities. 2.When a bond issuer offers some form of additional consideration (a“sweetener”) to induce conversion, the sweetener is accounted for as a(n) 3. Corporations issue convertible debt for two main reasons. One is the desire toraise equity capital that, assuming conversion, will arise when the originaldebt is converted. The other is
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