1. Which of the following statements is correct?
The company does not receive additional funds when warrants are exercised.
The company receives additional funds when bonds are converted
Warrants are similar to short-term call options.
Warrants can sometimes be detached and traded separately from the debt with which they were issued.
None of the above.
2. Connelly, Inc. has 9% conveible bonds that were issued at par, but are now worth $1,100. The bonds can be converted into 30 shares of common stock. The company's common stock currently sells for $37.50. Which of the following statements is correct?
Market interest rates have decreased since the bonds were issued.
Market interest rates have increased since the bonds were issued.
Market interest rates have remained the same since the bonds were issued.
Need more information
None of the above