When a Company Has a Convertible Bond in Its Capital

question 60

Multiple Choice

When a company has a convertible bond in its capital structure,

• A) it can reduce its debt-to-equity ratio by calling the bond.
• B) there is no effect on the firm's earnings per share.
• C) there is no advantage to the firm in forcing conversion of the bonds.
• D) all of these options are correct.

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