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with the leasing and purchasing alternatives. The
more desirable alternative is the one that has the
lower present value of after-tax cash outflows.
FASB Standard No. 13 requires firms to show financial (or capital) leases as assets and corresponding liabilities on their balance sheets; operating
leases must be shown in footnotes to the financial
statements. A number of commonly cited advantages and disadvantages should be considered when
making lease-versus-purchase decisions.
LG2 LG3 Describe the basic types of convertible securities,
their general features, and financing with con- vertibles. Corporate bonds and preferred stock may
both be convertible into common stock. The conversion ratio indicates the number of shares for which a
convertible can be exchanged and determines the
conversion price. A conversion privilege is nearly always available at any time in the life of the security.
The conversion (or stock) value is the value of the
convertible measured in terms of the market pri...
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This document was uploaded on 01/19/2014.
- Fall '13