A firm has experienced a significant decrease in share value. In retrospect, which of the following securities would have been best to have issued prior to the change in share value?
A) Convertible bonds
B) Convertible preferred stock
C) Common stock
D) Straight debt

Question

Quizplus · Accepted Answer

Issuing common stock before a decrease in share value would have been beneficial as it would have allowed the firm to raise more capital at a higher price, minimizing dilution and maximizing funds raised.

A Firm Has Experienced a Significant Decrease in Share Value