All except which of the following are reasons why companies issue convertible securities?
A) Cheaper total cost than nonconvertible securities
B) Lower interest payments than nonconvertible securities
C) Sell common stock at a price above current market price
D) Deferred issuance of common stock

Question

Quizplus · Accepted Answer

Convertible securities offer several advantages to issuing companies, but having a cheaper total cost than nonconvertible securities is not typically one of them. Convertible securities are attractive to companies primarily because they come with lower interest payments (due to the conversion feature), allow the company to potentially sell common stock at a price above the current market price (if the securities are converted), and enable the deferral of issuing common stock until the securities are converted, which can be advantageous in managing dilution and capital structure.

All Except Which of the Following Are Reasons Why Companies