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- A convertible bond can be converted into ________. A. preferred stock B. common stock and then converted into preferred stock C. common stock of a different company D. common stock of the companyWhy do convertible bonds referred to as potential common shares?A convertible bond can be converted into ________. a. common stock of a different company b. common stock of the company c. common stock and then converted into preferred stock d. preferred stock
- Convertible preferred stock is normally converted into a. shares of common stock b. warrants c. debentures d. secured bondsWhich type of stock pays a fixed dividend? A. common B. preferred C. debenture D. convertibleWhich statement is true regarding the accounting treatment for convertible preferred shares under IFRS? Question 21 options: a) Convertible preferred shares are initially measured at the fair value of the cash or other asset received. b) At conversion, a gain or loss is recognized on the difference between the carrying value of the equity portion of the shares and the fair value. c) Convertible preferred shares are subsequently measured at fair value. d) The liability and equity elements of convertible preferred shares must be presented separately on the statement of financial position.
- Preferred stock may have all of the following characteristics in common with bonds with the exception of Select one: A. a possible conversion option into common stock B. tax-deductible payments C. annuity payments D. the lack of voting rights E. a fixed liquidation value7) Convertible bonds and convertible preferred stock are always considered dilutive for earning per share purposes. (True/False)Explain how convertible securities are determined to bepotentially dilutive common shares and how thoseconvertible securities that are not considered to be potentiallydilutive common shares enter into the determinationof earnings per share data.
- The diluted earnings per share calculation includes Select one: O a. any convertible security that is antidilutive O b. only potential ordinary shares that are dilutive O c. all dilutive and antidilutive potential ordinary shares O d. all dilutive and antidilutive convertible securitiesHow is the potentially dilutive effect of convertible preferred stock reflected in EPS calculations by the if-converted method? How is this different from the way convertible bonds are considered?Mandatorily redeemable preferred stock (preference shares) is reported among liabilities and their dividends are reported in the income statement as interest expense using a. U.S. GAAP. b. IFRS. c. Both U.S. GAAP and IFRS. d. Neither U.S. GAAP nor IFRS.