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mantparn mantparn
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7 years ago
Which of the following is true of conversion feature of a bond?
A)  It adds a degree of speculation to a bond issue, although the issue still maintains its value as a bond.
B) It decreases the marketability and liquidity of a bond since conversion feature is perceived by the market as a pessimistic approach about the firm's future.
C) It is analogous to the put option, since it gives the bondholders the option to sell the bonds at any time till maturity.
D) It increases the cost of debt financing.
Textbook 
Principles of Managerial Finance

Principles of Managerial Finance


Edition: 14th
Authors:
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alovelyalovely
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7 years ago
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mantparn Author
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7 years ago
Thanks for the assistance, I've marked your post as best answer
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