One of the main advantages of convertible debt is that it is attractive to investors because ______.
A)their risk of loss is minimized
B)they will be repaid for the loan when the company is successful
C)they may be entitled to discounts on the share price
D)they will be the first to own stock in your company

Question

Quizplus · Accepted Answer

Convertible debt allows investors to convert their debt into equity, usually at a discount rate, when the company reaches a certain milestone or when they decide to sell their shares. This gives them the potential to earn a higher return on their investment and also provides some protection in case the company fails to reach its goals. The discounted share price is a significant benefit for investors because it allows them to buy shares at a lower price than what will be offered to other investors in the future.

One of the Main Advantages of Convertible Debt Is That