Multiple Choice
Which of the following is the most sensible reason for issuing convertibles?
A) Convertibles are convenient and flexible-they're usually unsecured and subordinated, and cash requirements for debt service are relatively low.
B) Interest rates on convertible issues are significantly less than on straight debt.
C) Firms that need equity capital use convertibles as a roundabout way of issuing stock.
D) Firms prefer to issue convertibles when their shares are undervalued.
Correct Answer:
Verified
Correct Answer:
Verified
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