When a company issues convertible securities, its usual intention is future ____.
A) issuance of common stock
B) reduction of outstanding common stock
C) issuance of nonconvertible debt and preferred stock
D) issuance of preferred stock

Question

Quizplus · Accepted Answer

When a company issues convertible securities, its intention is to raise funds through debt initially and then convert the debt into equity by issuing common stock in the future. This allows the company to attract investors who are interested in both debt and equity securities.

When a Company Issues Convertible Securities, Its Usual Intention Is