Critical Thinking 6. What do you think Terry's creditors' (i.e. bank and bond holder) reaction will be to using treasury stock to settle NP? In other words, based on your changes to the nancial statements and the change in the ratios, do you think the creditors will be happy with the decision? Why or why not? The CFO is concerned with the CEO's decision to issue stock to repay this debt. He feels it is inappropriate to dilute the control of their current owners by issuing stock without giving them any opportunity to retain their control (i.e. by buying up a percentage of the newly reissued shares). Provide two (2) arguments that the CFO could use to convince the CEO that they should repay the debt with cash instead of stock