Podcast
Questions and Answers
What is the primary role of a trustee in a bond indenture?
What is the primary role of a trustee in a bond indenture?
- To ensure the bondholder's interests are protected (correct)
- To ensure the issuer's interests are protected
- To manage the sinking fund for bond amortization
- To facilitate the conversion of bonds to common stock
Which of the following is a bond feature that constrains the actions of the borrower?
Which of the following is a bond feature that constrains the actions of the borrower?
- Call provision
- Conversion option
- Sinking fund
- Restrictive covenant (correct)
What is the purpose of a call provision in a bond contract?
What is the purpose of a call provision in a bond contract?
- To give the issuer the right to redeem the bonds before maturity (correct)
- To constrain the actions of the borrower
- To allow bondholders to exchange their bonds for common stock
- To require the issuer to make annual payments to amortize the bond
Which bond feature allows bondholders to exchange their investment for a fixed number of shares of common stock?
Which bond feature allows bondholders to exchange their investment for a fixed number of shares of common stock?
What is the purpose of a sinking fund in a bond issue?
What is the purpose of a sinking fund in a bond issue?
Which of the following is NOT a typical bond feature discussed in the text?
Which of the following is NOT a typical bond feature discussed in the text?
What feature of preferred stock allows the issuing company to redeem or buy back the stock at a predetermined price?
What feature of preferred stock allows the issuing company to redeem or buy back the stock at a predetermined price?
What is the amount paid by the company in excess of the par value when calling or redeeming a preferred stock issue?
What is the amount paid by the company in excess of the par value when calling or redeeming a preferred stock issue?
Which feature of preferred stock requires that any unpaid dividends be paid before common stock dividends can be distributed?
Which feature of preferred stock requires that any unpaid dividends be paid before common stock dividends can be distributed?
What provision effectively sets a maturity date for preferred stock issues?
What provision effectively sets a maturity date for preferred stock issues?
Which statement about common stock is true?
Which statement about common stock is true?
What feature is NOT typically associated with preferred stock?
What feature is NOT typically associated with preferred stock?
What is a bond indenture?
What is a bond indenture?
Which of the following is NOT a major bond rating agency?
Which of the following is NOT a major bond rating agency?
What is the term for a provision in a bond indenture that restricts certain actions by the issuer?
What is the term for a provision in a bond indenture that restricts certain actions by the issuer?
Which of the following bonds are considered investment grade?
Which of the following bonds are considered investment grade?
What is a call provision in a bond indenture?
What is a call provision in a bond indenture?
How can a sinking fund be used in relation to bonds?
How can a sinking fund be used in relation to bonds?
Flashcards are hidden until you start studying
