Which Three of the Following Are Advantages of Convertible Bonds

question 6

Multiple Choice

Which three of the following are advantages of convertible bonds to the issuing company?

• A) It offers a lower coupon than on a similar debenture.
• B) It can be self- liquidating.
• C) It does not contribute to the overall borrowing levels.
• D) The interest is tax deductible.

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Definitions:

Capital Balances

The amount of equity each partner has in a partnership or the equity accounts in a corporation's balance sheet.

Capital Balances

The amounts of money or value that members or partners have contributed to a company, partnership, or organization, often reflected in equity accounts.

Withdrawal

The act of removing funds from a bank account, or taking capital out of a business by an owner for personal use.

Capital Interest

Interest attributable to the ownership or investment in a business entity or property, often reflecting the cost of financing the entity's assets.