It is a bond or share of preferred stock that can be converted at the option of the holder into common stock of the same corporation.

The ratio of exchange between the convertible security and the common stock can be stated in terms of either a _____.

The current market price of the common stock of the mythical ABC Corporation is $40 per share. If the company raises capital with an issue of common stock, what would most likely happen?

The convertible bond may be viewed as straight debt plus an option to purchase common stock in the corporation. If the expiration of the option and the maturity of the convertible are the same, then the following relationship roughly holds _____.

It is the price at which a similar but nonconvertible bond of the same company would sell in the open market.

A common stock has exercise price of P10 per share, what is the theoretical value if the market price is at P12?

Which is true about exchangeable bond?

It is the combination of two companies in the same line of business.

It is the combination of two companies with unrelated line of business.

When does a strategic acquisition occur?

When does a financial acquisition occur?

If the market price of Acquiring Company is $60 per share and that of Bought Company is $30 and Acquiring Company offers a half share of its stock for each share of Bought Company, the ratio of exchange of market prices will be ____.

A number of industries are being transformed owing to an increasingly popular merger and acquisition strategy is called ___.

In evaluating the prospective acquisition, the buying company should estimate the future cash flows that the acquisition is expected to add after taxes. We are interested in what is known as ___.

Which of the folowing statements is true?

It is an offer to purchase shares of stock of another company at a fixed price per share from shareholders who surrender their shares.

This provision is meant to force the potential acquirer into negotiating directly with the board of directors.

This provision requires supermajority shareholder approval to modify the corporate charter and any previously passed antitakeover provisions.

Two or more firms collaborate to such an extent that they jointly establish and control a separate company to meet their specific set of objectives is called ___.

What happens in a partial sell-off?

Subcontracting a certain business operation to an outside firm instead of doing it in house is called ____.

The sale of assets of a firm, either voluntarily or in bankruptcy.

What happens in a spin-off?

An investment concentrated in one line of business. The extreme opposite of a pure play would be an investment in a conglomerate.

A primarily debt-financed purchase of all the stock or assets of a company, subsidiary, or division by an investor group.

Which of the folowing statements is true?

An extension involves creditors postponing the maturity of their obligations. By not forcing legal proceedings, What would happen?

It represents an orderly private liquidation of a company away from the bankruptcy courts.

It is an effort to keep a company alive by changing its capital structure.

The rule in bankruptcy or reorganization that claims of a set of claim holders must be paid, or settled, in full before the next, junior, set of claim holders may be paid anything.

The number of units of one currency that may be purchased with one unit of another currency is called ____.

Which is a type of exchange-rate risk exposure?

An accounting gain or loss arising from the translation of the assets and liabilities of a foreign subsidiary into the parent company’s currency is called ___.

A contract for the delivery of a commodity, foreign currency, or financial instrument at a price specified now, with delivery and settlement at a specified future date.

A contract that gives the holder the right to buy (call) or sell (put) a specific amount of a foreign currency at some specified price until a certain (expiration) date.

The idea that a basket of goods should sell for the same price in two countries, after exchange rates are taken into account.

It is simply a written statement by the exporter ordering the importer to pay a specific amount of money at a specific time.

It is a shipping document used in the transportation of goods from the exporter to the importer.

Which best describes a countertrade?

It involves the outright sale of the exporting firm’s accounts receivable to a factoring institution, called a ____.

It is a means of financing foreign trade that resembles export factoring.

Which of the folowing statements is true?

A contract that gives the holder the right to sell a specified quantity of the underlying asset at a predetermined price (the exercise price) on or before a fixed expiration date.

It is whereby a company expands either forward toward the ultimate consumer or backward toward the source of raw material, may also bring about economies.

Which of the folowing statements is true?

A method of accounting treatment for a merger based on the market price paid for the acquired company.

A friendly acquirer who, at the invitation of a target company, purchases shares from the hostile bidder(s) or launches a friendly counterbid to frustrate the initial, unfriendly bidder(s).

The sale is to the management of the division being sold, the company having decided that the division no longer fits its strategic objectives. This type of transaction is ___.

A reorganization that a majority of a company’s creditors have approved prior to the beginning of a bankruptcy proceeding.

Which of the folowing statements is true?