One motive for issuing convertibles is that convertible securities can be issued with far fewer restrictive covenants than nonconvertibles.

Question

Quizplus · Accepted Answer

This statement is true. Convertible securities are often considered less risky than nonconvertibles, which means they can be sold with fewer restrictive covenants. This can make them more attractive to investors who are willing to take on some risk in exchange for higher potential returns.

One Motive for Issuing Convertibles Is That Convertible Securities Can