By using convertible bonds, an issuing firm can temporarily raise debt, which is typically less expensive than common stock, to finance projects.

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Convertible bonds allow a company to raise debt at a lower cost than common stock, as they offer investors the option to convert their bonds into equity (stock) at a later date. This can be a useful financing tool for companies looking to fund projects, as it allows them to temporarily raise capital without diluting the ownership stake of their existing shareholders.

By Using Convertible Bonds, an Issuing Firm Can Temporarily Raise