A company bond that's sponsored solely by using complete faith and credit of the company.. -
ANS-Debenture
A company has issued 9%, $1,000 par convertible debenture which convert at $50. The not
unusual inventory is currently buying and selling at $60. If the bond and the common inventory
are trading at parity a purchaser shopping 5M of the bonds pays: - ANS-Answer $6,000.
The bonds are convertible at $50, based on a $1,000 par value therefore each bond convert into
20 stocks at $50. If the common inventory is trading at $60 the bond should be buying and
selling at $60 x 20 = $1,200
Since they're shopping for 5M that means that are paying five x $1,2 hundred = $6,000
A company has issued bonds at eight%. Three years later similar troubles are being supplied
inside the number one market at 7% which of the subsequent statements may be real about the
modern-day yield and the nominal yield? - ANS-The modern yield could be lower than the
nominal yield. The dollar charge of the bond might be at a premium.
Nominal (said) = .08
Market charge of bond = .08/.07 = 1,143
Current Yield = = .06999
A business enterprise issued a 7% AA sinking fund debenture at par. Three years later,
comparable problems are being issues at eight%. Which of the subsequent is actual about the
first rate 7% trouble? How does the modern yield relate to the nominal yield - ANS-The modern
yield could be better than the nominal yield.
The nominal yield (stated yield) can be 7%
The market price of the yield will drop while the brand new troubles are at a better yield.
Current yield = annual hobby $/ current marketplace charge
marketplace fee = .07 / .08 = 875
Current yield =
Current yield = .08
Current yield > Nominal
, A client owns 256 shares of ABC common inventory. ABC pronounces a rights providing, with
the terms being that for every 15 rights a shareholder can also buy one additional proportion.At
$24 a percentage. Any fractional rights may be rounded up to buy an additional share.
How many shares may the patron buy with those right? - ANS-A percentage holder should buy
a maximum of 18 stocks with those rights paying $432 for them.
The 17.06 stocks can be rounded up to 18.
A consumer locations an to buy bonds. The order reads
"Buy 5M ABC 9s M'35 @ ninety GTC"
At which of the following will the charge be accomplished
I 89
II 90
III ninety one
IV ninety two - ANS-I and II
The order is a Limit Buy so the purchase will handiest be initiated at or below 90
A center age girl widowed patron has an investment objective of strong earnings and wants
minimal market and liquidity danger. What sort of preferred inventory will be the nice
recommendation
I Participating
II Convertible
III Straight Preferred Stock
IV Variable fee desired - ANS-IV Variable Rate preferred
A municipality desires to promote a bond problem this is NOT subsidized by means of taxing
energy. Which of the following bonds can be issued?
I Revenue Bond
II Industrial Revenue Bond
III General responsibility Bond
IV Lease condominium bond - ANS-I , II, and IV
Only General obligation bonds are required by means of taxing energy. The relaxation are sales
subsidized
A Sell Stop order is done whilst?
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