If an investor expects the firm to grow slowly, which of the following strategies would be best?

Question

Quizplus · Accepted Answer

Buying the firm's convertible securities is often a good strategy when expecting slow growth. Convertible securities, such as convertible bonds or convertible preferred shares, offer the potential for income through interest or dividends, plus the option to convert into a fixed number of common shares, often at a premium to the market price. This provides a downside protection if the stock doesn't perform well, but also allows participation in any upside if the company grows more than expected.

If an Investor Expects the Firm to Grow Slowly, Which