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1. Stock purchase plans can be compensatory or non-compensatory. Which of the fo

ID: 2446363 • Letter: 1

Question

1.

Stock purchase plans can be compensatory or non-compensatory. Which of the following is not a characteristic of a non-compensatory stock purchase plan?

It is open to almost all full-time employees.

All of these are characteristics.

The plan offers no substantive option feature.

None of these answers are correct

The discount from market price is small.

2

A typical company can have multiple types of equity and debt instruments in its capital structure. Convertible bonds are one type of debt instrument that could be present. Convertible bonds _________________________.

pay interest only in the event earnings are sufficient to cover the interest.

are usually secured by a first or second mortgage.

none of these answers are correct

may be exchanged for equity securities.

have priority over other indebtedness.

Explanation / Answer

1. all of these are characterstics.

2. are usually secured by a first or second mortgage.