Corporate governance has become increasingly important over the years.  The Sarbanes-Oxley (SOX) Act was enacted to improve transparency in financial accounting and to prevent fraud.  Which of the following is correct?

Tactics that firms use to avoid hostile takeovers include:

Both Adams and Wolfe are large public corporations with subsidiaries throughout the world.   Adams  uses a centralized approach and  makes most of the decisions for its subsidiaries.  Wolfe  uses a decentralized approach and its subsidiaries make most of their own decisions.   Which of the following is correct?

With convertible bonds, 

A firm’s common stock currently sells for $17.50.  Its 10% convertible bonds (issued at par $1000)  now sell for $900 and the conversion price is $20.  What is the conversion ratio?

Convertible bonds are:

KORO Corporation’s common stock currently sells for $27.50.  Its  8% convertible bonds (issued at par $1000) now sell for $950.   The bonds can be converted into 40 shares of common stock.  What is the conversion price?

KORO Corporation’s common stock currently sells  for $27.50.  Its  8% convertible bonds (issued at par $1000) now sell for $950.   The bonds can be converted into 40 shares of common stock.  What is the conversion value of the bond?

Which of the following is correct?

Warrants are similar to long-term put options

The company receives additional funds when warrants are exercised

The company receives additional funds when bonds are converted

Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual.

none of the above

A company will issue 20-year bonds with annual interest payments.  Each bond will include 20 warrants that give the holder to purchase one share of stock per warrant.  Each warrant is expected to have a value of $5.75.  A similar straight-debt issue would require an 8% coupon.  What coupon rate should be set on the bonds with warrants so that the package will sell for $1,000?