[Anonymous]

Which one of the following statements correctly compares bond financing alternatives?

A: A convertible bond must be convereted to common stock prior to its maturity

B: a call provision is usually considered dettrimental tot eh investor

C: A Bond with a call provision typically has a lower yield to maturity than a similar bond without a call provision

D: a sinking fund prohbits the firm from redeeming a bond issue priro to its final maturity

Answer: B. A call provision allows the corporation to call the bond even if the bondholder does not want to dispose of the investment.

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How does this “compare bond financing alternatives”? Option B doesn’t even answer the question.

[Anonymous]

I think it's basically just saying, which one of those statements is true. The other ones are false statements. I hate the wording of these questions!

[Anonymous]

I think it's basically just saying, which one of those statements is true. The other ones are false statements. I hate the wording of these questions!

[Whopper Warrior]

I think it relates because bond financing has many options:

Call (we can call it in early)

Convertible (we can convert the bonds into stock)

Bonds with Warrants (you can keep your bond and get stock)

Floating Intrest / Pegged Interest Bonds

Also all the other answers are not as good as answer B, and they all deal with the simillar issue.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[Whopper Warrior]

I think it relates because bond financing has many options:

Call (we can call it in early)

Convertible (we can convert the bonds into stock)

Bonds with Warrants (you can keep your bond and get stock)

Floating Intrest / Pegged Interest Bonds

Also all the other answers are not as good as answer B, and they all deal with the simillar issue.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[Author]

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