The following benefits occur to the corporation after a forced conversion of a convertible bond EXCEPT:
A) Lower times interest earned ratio
B) Lower debt-to-asset ratio
C) Higher earnings after taxes
D) All of these options are benefits.

Question

Quizplus · Accepted Answer

A forced conversion of a convertible bond results in a decrease in the company's debt-to-asset ratio and an increase in equity, which improves the company's financial position. However, it does not lead to higher earnings after taxes, and may sometimes result in a lower times interest earned ratio.

The Following Benefits Occur to the Corporation After a Forced