Convertible fixed-income securities, such as debentures or preferred stocks, that may be exchanged for the companys common
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Convertible fixed-income securities, such as debentures or preferred stocks, that may be exchanged for the company’s common stock at the holder’s option. By giving the fixed-income security holder an opportunity to share in any increase in its common stock value, the firm is able to reduce potential conflicts between the fixed-income security holders and stockholders, resulting in lower agency costs.
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