Fundamentals of Investment Management, 7/e Geoffrey A. Hirt,
DePaul University Stanley B. Block,
Texas Christian University
Convertible Securities and Warrants
Chapter Objectives
- Understand why investors are attracted to convertible securities and warrants.
- Explain how convertible securities values are determined.
- Describe how investors may be forced to convert bonds or preferred stock into common stock.
- Explain the advantages and disadvantages of convertible securities to the corporate issuer.
- Describe the accounting requirements associated with convertibles.
- Explain why warrants represent highly speculative investments.
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