1. A convertible bond is always worth (remember to choose the best answer):
a. the conversion value
b. whichever is greater: the conversion value or straight bond value
c. the straight debt value
d. the convertible premium
e. none of the answers is correct
2. Which of the following statement is correct?
a. All the answers are incorrect.
b. According to Standard & Poor’s ratings, investment grade bonds have a rating of BB+ or below.
c. Preferred stockholders are entitled to all residual income of the firm.
d. With a debenture bond, the creditors have a specific claim on the issuing company, a right to the firm’s specific assets.
e. A bond that is not backed by any collateral is called a debenture.