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Phil Has Researched TLM Technologies and Believes the Firm Is

question 121

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Phil has researched TLM Technologies and believes the firm is poised to vastly increase in value. He wants to invest in this company. Phil has decided to purchase TLM Technologies bonds so that he can have a steady stream of interest income. However, he still wishes that he could share in the firm's success along with TLM's shareholders. Which one of the following bond features will help Phil fulfill his wish?

Comprehend the relationship between EBIT, ROE, EPS, and financial efficiency.
Recognize the importance of the optimal capital structure and its impact on stock price.
Realize the difference between a firm's target and optimal capital structure.
Acknowledge how financial leverage affects a firm's ROA and cost structure.

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