Question: Nicholas Industries can issue a 2 0 - year bond with a 6 % annual coupon. This bond is not convertible, is not callable, and

Nicholas Industries 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, Nicholas could issue a

20 -

year bond that is convertible into common equity, may be called, and has a sinking fund. Which of the following most accurately describes the coupon rate that Nicholas would have to pay on the convertible, callable bond?

Group of answer choices

Less than

6 %

It could be less than, equal to

,

or greater than

6 % .

Exactly equal to

6 % .

Greater than

6 % .

Exactly equal to

8 % .

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