Debt in the capital structure could be treated as if it were common equity in computing the weighted average cost of capital if the debt were
A)callable.
B)participating.
C)cumulative.
D)convertible.

Question

Quizplus · Accepted Answer

Convertible debt allows the debt holders to convert their debt into equity at a predetermined conversion rate. Therefore, in computing the weighted average cost of capital, convertible debt can be treated as if it were common equity.

Debt in the Capital Structure Could Be Treated as If