Question: This chapter argues that convertible securities are a form of delayed equity financing allowing the sale of equity at a 10 to 20 percent premium

This chapter argues that convertible securities are a form of delayed equity financing allowing the sale of equity at a 10 to 20 percent premium over current market price. Yet most convertibles are finally called only if the current market price is well in excess of the conversion price. Would the firm have been better off to simply wait and sell the later? Explain your position.

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