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If the Share Price Rises Substantially Above the Conversion Price,an

Question 5

Multiple Choice

If the share price rises substantially above the conversion price,an advantage to the corporation would be:


A) the premium would decrease.
B) the floor price would offer the investor downside protection.
C) the bond would most likely be converted into common shares and the debt would not have to be repaid.
D) the firm could raise the capital needed by issuing fewer shares than those sold from the conversion of the securities.

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