3. Convertible bonds, warrants, and other exotic bond features As the name suggests, convertible bonds allow the owner t

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3 Convertible Bonds Warrants And Other Exotic Bond Features As The Name Suggests Convertible Bonds Allow The Owner T 1 (28.88 KiB) Viewed 9 times

3. Convertible bonds, warrants, and other exotic bond features As the name suggests, convertible bonds allow the owner the option to convert the bonds into a fixed number of shares of common stock. Innovative Energy LLC is a start-up company that just raised $100,000 to conduct a third-party feasibility study on its business model. The company agreed to treat the $100,000 investment as debt at 10% interest rate; however, the investor has the right to exchange the debt for common stock during the company's Next financing round. Which of the following terms best describes the $100,000 investment? Warrant Convertible bond Consider the case of an investor, Nazim: Nazim wants to include bonds in his investment portfolio, but he wants the option to sell the bond to the issuer at a specified price on a certain date before the maturity of the bond. Which of the following bond redemption features should he pick? Putable bond Warrants Nazim also recently bought bonds with a cause stating that interest will be paid only when the company has enough earnings to pay for it. Nazim has Invested in