Amram Inc.can issue a 20-year bond with a 6% annual coupon.This bond is not convertible,is not callable,and has no sinking fund.Alternatively,Amram could issue a 20-year bond that is convertible into common equity,may be called,and has a sinking fund.What is the coupon rate that Amram would have to pay on the convertible,callable bond?
A) It could be less than, equal to, or greater than 6%.
B) It is greater than 6%.
C) It is exactly equal to 6%.
D) It is less than 6%.
Correct Answer:
Verified
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