If a Convertible Bond Is Not Called nor Converted, the Firm

question 13

True/False

If a convertible bond is not called nor converted, the firm must ultimately retire it.​

---

Definitions:

Flotation Costs

Expenses incurred by a company when it issues new securities, including fees for underwriting, legal counsel, and registration.

After-Tax Cash Inflows

The amount of cash generated from operations or investments after accounting for taxes, crucial for evaluating financial performance.

Debt-Equity Ratio

A ratio detailing the comparative use of borrowed funds and equity by a company to finance its assets.

Flotation Cost

The total costs associated with issuing new securities, including fees for underwriting, legal advice, and registration.