Which of the Following Is the Most Sensible Reason for Issuing

question 48

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.

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Definitions:

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a given language, especially in terms of word order and punctuation.

Telegraphic Speech

A stage of language development in young children in which they use two-word sentences with high-content words, omitting smaller, less important ones.

Proposition

An assertion that communicates a conviction or opinion, and has the potential to be accurate or erroneous.

Standard Form

A way of structuring arguments, statements, or equations according to established rules to make them clearer, easier to analyze, or solve.