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NewCo can either issue bonds or shares to finance its next project. a. If they announce they are issuing bonds, what direction is their share

NewCo can either issue bonds or shares to finance its next project.

a. If they announce they are issuing bonds, what direction is their share price likely to move in? Why?

b. If they announce that they are issuing shares, what direction is their share price likely to move in? Why?

c. NewCo decides that they are going to issue bonds, and that these bonds will be convertible. If this makes you less interested in buying their bonds, what do you probably believe about NewCos future prospects?

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