True or false?

$($a$)$ Convertible bonds are usually senior claims on the firm

$($b$)$ The higher the conversion ratio, the more valuable the convertible

$($c$)$ The higher the conversion price, the more valuable the convertible

$($d$)$ Convertible bonds do not share fully in the price of the common

stock, but they provide some protection against a decline

Lease characteristics: True or false?

$($a$)$ Lease payments are usually made at the start of each period. Thus,

the first payment is usually made as soon as the lease contract is

signed

$($b$)$ A sensible motive for financial leases is that they provide off$-$balance$-$

sheet financing

$($c$)$ The cost of capital for a financial lease is the pretax interest rate the

company would pay on a bank loan

$($d$)$ An equivalent loan's principal plus after$-$tax interest payments ex$-$

actly match the after$-$tax cash flows of the lease

$($e$)$ A financial lease should not be undertaken unless it provides more

financing than the equivalent loan

$($f$)$ It makes sense for firms that pay no taxes to lease from firms that do

$($g$)$ Other things equal, the net tax advantage of leasing increases as

nominal interest rates increase