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Convertible debt represents debt the firm has the ability to change to equity at a certain threshold. Because the firm holds the option to convert,
Convertible debt represents debt the firm has the ability to change to equity
at a certain threshold. Because the firm holds the option to convert, the firm
will engage the option when it is in their best interests to do so In
retrospect, the firm is going to exercise the option to convert debt to equity
when payment of fixed debt obligations is stressing the firm.
True
False
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