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Corporations issue convertible debt for two main reasons. One is the desire to raise equity capital that, assuming conversion, will arise when the original

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Corporations issue convertible debt for two main reasons. One is the desire to raise equity capital that, assuming conversion, will arise when the original debt is converted. The other is O that many corporations can obtain debt financing at lower rates. O the fact that equity capital has issue costs that convertible debt does not. O that convertible bonds will always sell at a premium. O the ease with which convertible debt is sold even if the company has a poor credit rating.

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