Question: Nicholas industries can issue a 2 0 year bond with a 6 % annual coupon. This bond does not convertible is not called. Walton has

Nicholas industries can issue a

20

year bond with a

6 %

annual coupon. This bond does not convertible is not called. Walton has no sinking fund. Alternatively, Nicola could issue a

20

year bond that is convert 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 call bond exactly equal to

6 %

exactly equal to

8 %

less than

6 %

greater than

6 % .

It could be less than equal to or greater than

6 % .

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