1. Which of the following statements regarding Convertible Bonds is INCORRECT?
A. Convertible bonds generally have lower yield than otherwise similar non-convertible bonds.
B. Convertible bonds generally have lower yield than otherwise similar Callable bonds.
C. Convertible bond holders can choose to convert their bonds into stocks at a pre-determined ratio.
D. Convertibility provision is a favorable option to bond holders.
E. Issuers can choose to retire Convertible bonds prior to maturity.
2. A payment made by a firm to its owners in the form of new shares of stock is called a ___________ dividend.
A. stock
B. extra
C. liquidating
D. normal
E. special