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AB Technology Inc. is in the business of manufacturing smartphone screens. While the underlying business is risky, the managers of AB Technology believe that their
AB Technology Inc. is in the business of manufacturing smartphone screens. While the underlying business is risky, the managers of AB Technology believe that their cash flows are much more stable than perceived by the market, largely because of several long-term contracts that the firm has with major smartphone manufacturers. They are considering raising capital either via regular bonds or via convertible bonds. Which of these two options would you recommend? It does not matter. Convertible bonds Regular bonds
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