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

Question

Quizplus · Accepted Answer

When a company issues convertible securities, it usually intends to issue common stock in the future. Convertible securities, such as convertible bonds or convertible preferred stock, can be converted into common stock at a certain price, giving investors the option to participate in the company's potential growth through ownership of common stock.

When a Company Issues Convertible Securities, Its Usual Intention Is