The more desirable alternative is the one that has

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Unformatted text preview: associated 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.

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