FIN 540 Homework Chapter 19

Directions: Answer the following five questions on a separate document. Explain how you reached the

answer or show your work if a mathematical calculation is needed, or both. Submit your assignment

using the assignment link in the course shell. Each question is worth five points apiece for a total of 20

points for this homework assignment.

1. Which of the following statements about convertibles is most CORRECT?

     a. The coupon interest rate on a firms convertibles is generally set higher than the market yield
   
        on its otherwise similar straight debt.
   
     b. One advantage of convertibles over warrants is that the issuer receives additional cash
   
        money when convertibles are...