An Advantage of a Convertible Security Is That It Provides

question 170

Multiple Choice

An advantage of a convertible security is that it provides for deferred common stock financing. The purpose of deferring the sale of common stock is to

• A) increase the leverage of the firm.
• B) dilute the ownership interest.
• C) minimize dilution in earnings per share.
• D) time the sale of common stock when the price per share is basing.

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Definitions:

Endocrine Glands

Glands that secrete hormones directly into the bloodstream, regulating various body functions.

Ducts

Tubes, channels, or passages in the body or in a machine that convey fluid or air from one location to another.

Interstitial Fluid

Fluid that surrounds the body’s cells; consists of dissolved substances that leave the blood capillaries by filtration and diffusion.

Metabolism

The set of life-sustaining chemical reactions in organisms to convert food into energy, and build or maintain their cells.